Skip to main content
4 replies [Last post]
kevin
kevin's picture
Offline
Joined: 09/03/2009

A survey of landlords by London Councils shows the real impact the government’s proposed changes to the housing benefit system will have on the capital, with an estimated 82,000 households at risk of losing their homes.

Changes to Local Housing Allowance (LHA), the housing benefit for tenants renting privately, were announced by the government in June as part of a drive to stop people on benefits renting properties in expensive areas.

Landlords were asked in the survey whether they would cut the rent, refuse to renew tenancies or evict if tenants could not keep up with their rent payments as a result of the new caps.

Approximately 60 per cent of landlords surveyed said they would not lower the rent by any amount if the tenant could not pay the full rent due to changes in LHA entitlement.
 

If the shortfall in rent rises to over £20 per week, almost all landlords said they would evict the tenant or not renew the tenancy at the end of the period.
 

Over a quarter of landlords said they would decrease the number of properties they make available to people in receipt of housing benefit if these changes go ahead. 

London Councils’ figures show that instead of forcing the market to accept lower rents, the new caps will lead to even fewer homes being available for rental by people on low incomes.

Those unable to keep up with their rents will either be made homeless, forced to move into overcrowded accommodation, or have to move to less expensive boroughs, putting pressure on services like schools.

As part of a wider package of recommendations to help those most affected by the changes, London Councils is urging the government to increase an existing hardship fund to £18 million from next year. 

The organisation is also asking for more powers for councils so they can refuse to pay LHA to landlords who are profiteering from housing benefit. 

London Councils Executive Member for Housing, Mayor Sir Steve Bullock said:

“Judging from the reactions of landlords in our survey, the government’s proposals will have a huge impact on people living in the capital.  More than 82,000 households, many of them in work but on low incomes, could lose their homes.  This could equate to as many as 250,000 Londoners. 

“Cracking down on the worst excesses of a small minority of landlords is welcome, however we must make sure that any action that takes place does not have the devastating side-effect of pushing poorer people in the capital out of their homes”.

http://www.londoncouncils.gov.uk/media/current/pressdetail.htm?pk=1180<

http://www.londoncouncils.gov.uk/housing/briefings/landlordsurvey.htm<

n/a
kevin
kevin's picture
Offline
Joined: 09/03/2009

Housing People; Financing Housing recommends that housing associations should be set free to raise money through methods like equity investment. This so-called “equitisation” could raise £30 billion and build an extra 100,000 new homes a year. Using the housing association sector’s profits to raise money from organisations like pension funds would save taxpayers £5 billion in government grants, as well as helping solve Britain’s chronic housing shortages.

The report recommends associations should move towards social enterprise structures modelled on the successes of the Co-op, the John Lewis Partnership or BUPA. Under these mutual models, investors use flexible methods like buying preference stock - where interest gets paid only when the housing association is in profit.

If you would like a hard copy of this report priced at £10 + £3p&p then please email: janet.batterbee@policyexchange.org.uk<

Download PDF<

http://www.policyexchange.org.uk/publications/publication.cgi?id=205<

n/a
kevin
kevin's picture
Offline
Joined: 09/03/2009

Major reform of the housing benefit system is an early priority for the coalition government, but its impact will be disproportionately felt in the capital. Ian Mitchell reports


 

 When the coalition government announced significant changes to the housing benefit scheme, it was immediately evident that the changes would impact on London households disproportionately.could no longer pay the full rent.

 

Based on Department for Work and Pensions’ own figures, London Councils calculated that 17,000 London households would be affected by the caps to be introduced next April, while a further 89,000 would be affected by changes to the method of calculating LHA in October (see below).

Driven in part by a wish to stop the use of large properties in expensive market rental areas for people on benefits, in reality the caps have been set so low that in London 83 per cent of the claims affected will be one, two and three bed properties.

In the absence of any evidence of how London landlords might respond to changes in their tenant’s financial circumstances though, it was not possible to put a figure on how many of those people whose claims would be affected would be likely to lose their home.

A survey conducted by London Councils in conjunction with the London Landlord Accreditation Scheme has now established that around 60 per cent of landlords in the capital would not be prepared to lower their current rent by any amount if the tenant could no longer pay the full rent.

View all pages<


Page: 1  View page 2< |

 

download magazine

http://www.londoncouncils.gov.uk/publications/lbm/2010/october/loosening...<

n/a
kevin
kevin's picture
Offline
Joined: 09/03/2009

Some London local authorities have said that they have block booked bed-and-breakfast accommodation in Hastings, Reading, Luton and other towns outside the capital because there could be an exodus of around 200,000 people (82,000 families) who will no longer be able to afford to say in private rented housing if housing benefit is capped.

In the comprehensive spending review, Chancellor George Osborne announced that from next April housing benefit will be capped at £400 a week for a four-bedroom house, £340 for a three-bedroom home, £290 for a two-bedroom property and £250 for a one-bedroom property.

The council leaders gave the warning to the Work and Pensions Select Committee and said that landlords will not reduce rents following the government's changes so tenants will have no choice but to move out. One Labour MP has called the policy a form of "social cleansing".

Jon Cruddas said: "It is an exercise in social and economic cleansing. It is tantamount to cleansing the poor out of rich areas – a brutal piece of social engineering."

And David Orr, chief executive of the National Housing Federation, reckoned that the changes would see people out on the streets, saying: "Unless ministers urgently reconsider these punitive cuts, we could see more people sleeping rough than at any stage during the last 30 years."

But the government stuck by its policy, issuing this statement: "The current way that it is administered is unfair. It's not right that some families on benefits have been able to live in homes that most working families could not afford."

http://www.publicservice.co.uk/news_story.asp?id=14528<

n/a
Octavia (not verified)
Octavia's picture

I have worked in the UK for several years and never claimed a penny in fact just the opposit paid lot's of tax . Having been made unemployed a few months ago due to outsourcing I am looking very hard for a new job. The local council after helping me for the last couple of months with my rent which is much appreciated have now cut my help to a level well below my rent payment which has just gone up. I don't have a problem with the principle that I should fully pay my own rent but I am in the middle of a contract and will lose my deposit and be unable to find a new one for my next cheaper property more outside london. Plus since I don't know where I will get my work and I will move anywhere to work ! I cannot just move and lock into another 12 month contract? without my next job 

There is a lot of abuse of benefits in the UK in my opinion as an EU Guest in Britiain so I fully understand why things need to be controlled but a little bit more flexibility would really help. I have only been on benefit for two months and I am determined to get off it . 

I also don't understand why rents seem to be going up when as far as I can see lots of people will now be leaving London due the changes?

One way or another I will be working in the next few weeks! but just thought I'd share this feedback.

X