x
By using this website, you agree to our use of cookies to enhance your experience.
Written by rosalind renshaw

Caps to welfare payments that come into force this week will make 810,000 private rented homes unaffordable for tenants on housing benefit, it has been claimed.

Already, one local council in London has announced that it is planning how to help residents move out, if they can no longer afford to live there.

Research by the Chartered Institute of Housing for the Guardian newspaper has analysed the impact of caps to Local Housing Allowance, which is paid to housing benefit tenants in private rental accommodation.

It claims that 720,000 private rental homes in England will become unaffordable to housing benefit tenants, 60,000 in Scotland and 30,000 in Wales.

Tenants in London and the South-East will be hit hardest. A quarter of a million homes will become unaffordable in the region, says the CIH.

The new LHA caps restrict the maximum LHA payable to between £250 and £400 a week, depending on the number of bedrooms, with a top limit of four bedrooms.

The research also looked at the impact of setting LHA rates according to the lowest 30th percentile of local rents rather than the median 50%, which will be introduced from April. Effectively, this will mean that only one-third of private rental accommodation in any area will be available for LHA tenants.

Together, says the CIH research, the changes will mean there will be more families claiming benefit than available homes in some areas.

Private landlords have been under pressure to reduce their rents to the level of the new caps, in some cases in return for receiving LHA direct. For tenants whose landlords have decided against cutting rents, they have the choice – if they can afford it – of footing the difference themselves, or moving elsewhere to cheaper accommodation.

Grainia Long, interim chief executive of CIH, warned: “Welfare reforms will see for the first time more people chasing homes than the market currently provides.

“The only feasible option for many families who want to stay in their communities will be to borrow more or to spend less on essential items such as food.

“This could mean that more than 1.3 million private tenants face the New Year with dread, confronted with an uncomfortable prospect of homelessness or debt.

“Low income families could move to more affordable areas, creating benefit ghettoes and resulting in increased social disorder and a breakdown in community cohesion.”

Separately, Harrow Council is considering a housing report following months of consultation, including how to help residents move out of the area if they cannot afford local housing.

Portfolio holder for housing, Cllr Bob Currie, said: “We will be faced with residents who simply cannot afford to live in Harrow after all of the Government welfare benefit caps are enforced.

“We are planning now with our residents, tenants and leaseholders so that we are able to continue to protect and support our most vulnerable into the future.”

Comments

  • icon

    @Industry Observer - I have had all 3 so do I get a gold star? When I was unemployed I was previously self-employed and had an actual visit from them after just two weeks of claiming when all they were paying was my NI stamp! I asked the women would she be investigating me if I was female with half a dozen kids by unknown fathers and she had the honesty to admit that she wouldn't.

    When I signed on I was stood with my little “Job search diary” with some who were obviously working and on their mobiles arranging their next job. If I could hear them, so could the staff but all they wanted was those types in and out as soon as possible. So yes, been there, done that. My point is that the benefit system now allows people to live in accommodation that they could not afford if they were working and why should that continue? Why tug at the heart strings by saying they will cut down on food, when I would guarantee that a visit to their homes would find large flat screen TVs, Sky dish, cigarettes and alcohol!

    • 06 January 2012 11:05 AM
  • icon

    The data is meaningless as it is not expressed clearly enough.

    For example:-

    "It claims that 720,000 private rental homes in England will become unaffordable to housing benefit tenants, 60,000 in Scotland and 30,000 in Wales."

    Does this mean these homes are already occupied by LHA tenants who are going to find they can no longer afford the rent for them? Or that if they wanted to move into one of them that they would then be unaffordable?

    Another gem is:-

    “This could mean that more than 1.3 million private tenants face the New Year with dread, confronted with an uncomfortable prospect of homelessness or debt."

    Does this mean 1.3 million tenancies, or 1.3 million tenants 2 to a tenancy? If it is the former then 50% of all PRS tenancies are curently heldd by LHA tenants.

    I don't think so.

    @Hard hearted and salary thief

    What matters is wheher someone is a won't pay, in which case they deserve little or no sympathy, or a can't pay, in which case as long as it is not financial folly that has led them to a can't pay situation, they also deserve sympathy.

    Never had a crisis in your lives have you caused by matrimonial problems, bereavement or serious illness to name but three things that can make all else in life pale into insignificance if you are even aware of it?

    No - then think yourselves very lucky.

    • 06 January 2012 09:05 AM
  • icon

    @Hard Hearted - Couldn't agree with you more.

    • 05 January 2012 18:18 PM
  • icon

    Interesting that the Chartered Institute of Housing for the Guardian newspaper claims HB tenants will have to give up food to pay their rent. A most unlikely scenario, but one that will “tug at the heart strings” of Guardian readers. No mention of them giving up cigarettes, alcohol, Sky TV subscriptions or other NON-essentials. Do they seriously believe that rent payments will be high on their list of priorities?

    At last something is being done about those on benefit living a better life than those working. Why should those of us who work hard for a living subsidise those who don’t just so that they can live in areas that they could not afford to rent if they were working. Admittedly I would have preferred a system that encouraged people back into work by having their “high” rent paid for say a year after first claiming benefits, then drop.to the new limits.

    • 05 January 2012 11:38 AM
MovePal MovePal MovePal