Council told over half of housing associations will chop rents

More than half of housing association leased properties in the London borough of Hammersmith & Fulham will have their rents chopped in line with the Government’s housing benefit cuts.

A report to the council said 55% of housing association leased properties with housing benefit claimants will reduce their rents to meet the new housing benefit caps to be introduced in April.

There are 23,000 housing benefit claimants in the borough, and the council is engaging with local private landlords to see if they are willing to take housing benefit tenants are rent which will be capped to 30% of the local market rates.

With less than two months to go, it is still unclear how many landlords in all local authority areas will react to the Local Housing Allowance cuts.

The National Landlords Association claims that 76% of housing benefit landlords across the country have confirmed to it that they are planning to reduce the number of LHA homes they provide during 2011, and 40 per cent of these are planning to do so within the next three months.

*The Government is to set up an independent review into the housing benefit cuts and their effect on the private rental market.

Lord Freud, the welfare reform minister, said that the review would present its initial findings in the summer of 2012. But he criticised ‘scaremongering’ over the numbers of people likely to be made homeless by a shortfall between their housing benefit payments and their rents.

He said: “Some of the estimates of the number of people that will be made homeless are quite frankly ridiculous."

Editor's note: story updated and corrected. Our earlier report said 55% of private landlords were prepared to cut rents. This was not right and we would like to thank Hammersmith and Fulham Council for pointing this out.