Independent research commissioned by the housing charity Shelter from the University of Cambridge today shows that the number of London neighbourhoods that will be affordable to people claiming local housing allowance will halve by 2016 as a result of government cuts.
Independent research commissioned by the housing charity Shelter from the University of Cambridge today shows that the number of London neighbourhoods that will be affordable to people claiming local housing allowance will halve by 2016 as a result of government cuts. Under the current rate of local housing allowance, three quarters of London’s neighbourhoods are affordable for those who receive the benefit to live in private rented accommodation.
But the analysis shows that by 2016, the impact of cuts announced in June’s Emergency Budget will halve the number of London neighbourhoods affordable to claimants to 36%. Nearly 160,000 households across the capital will be affected by the cuts. The research is released ahead of today’s Commons debate on housing benefit.
Boroughs that will remain largely affordable by 2016 include Hillingdon, Ealing and Hounslow to the West; Enfield and Waltham Forest to the North; Newham, Barking and Dagenham and Havering to the East, and Lewisham, Bexley and parts of Croydon to the South.
Boroughs that will have the highest proportions of unaffordable property include Kensington & Chelsea and Westminster as well as Islington, Camden and Tower Hamlets. Shelter is warning that the cuts could change the make-up of London for decades to come.
Chief executive Campbell Robb said:
“This research shows that in just five years’ time, the number of London neighbourhoods affordable to those on local housing allowance will more than halve, with swathes of the capital becoming largely unaffordable.
“This will mean tens of thousands of households priced out of their homes and communities, creating concentrations of poverty across the city and adding to the already significant levels of homelessness and overcrowding in the city.”
“The 53,000 claimants in London who are in work may also be forced to move away from their jobs, so these proposals could ultimately act as a disincentive to work.”
The picture beyond 2016 could get even worse. Government plans to link housing benefit levels to the Consumer Price Index from 2013 will deliver an even bigger blow to people on local housing allowance.
Between 1999/2000 and 2007/08 median rents in London increased by 65%, compared to just a 17% increase of the CPI. Shelter add:
“Breaking the link between housing benefit and the cost of housing will see rents quickly outstrip the amounts people are receiving. While the impact will not be immediate, over time this is likely to make the situation starkly worse and even more neighbourhoods unaffordable.
“While Shelter supports reform of housing benefit, cuts on this scale are going to have a devastating economic and social impact on London and we urge the government to urgently rethink them.”
21 Responses to “Shelter: Housing benefit cuts will “change London for decades””
Stephen W
Is it conceivable that the state no longer being willing to pay any rent landlords request will actually help reduce the upward pressure on rents?
Also, oh no, only 36% of London neighbourhoods will be accessible to people on benefits. Oh no. About the same as are accessible to most working people.
Stuart Madewell
What is missing in this discussion is where Labour policy on Hb goes from here. Many posters have called for a return to Rent Controls. There is a way that ccan be done but it won’t be popular. That is by scrapping LHA and returning to the previous system which paid HB based on the the specific rent for the particular property. Prior to the intoduction of LHA, HB was based on what the Rent Officer determined was a ‘fair rent’ for that particular property. LHA replaced that by an allowance based on the ‘Broard Rental Market Area’. (BRMA) The BRMA covered different parts of London Boroughs. Landlords and tenants saw what the LHA was for their areas and tenants were meant to negotiate a lower rent.
In practice private landlords saw this as an opportunity to profiteer!!! James Purnell ‘reform’ was a disaster as it led to higher rents and higher HB bill. If he didn’t resign he should have been sacked!!!
Roger
Stuart is right.
With the best intentions New Labour created the problem with LHAs and ridiculously large BRMAs.
Labour’s 2010 manifesto accepted that something had to be done about correcting this and we need an alternative policy as well as a critique of the social catastrophe the ConDems are preparing.
Returning to rental officers is indeed worth looking at – although we need to avoid the term ‘rent control’ – the old system never stopped landlords from charging whatever rent they wanted to tenants, rather it just told them that there was an absolute and rationally set limit to what they could expect HB to pay for.
Nick H.
RT @leftfootfwd: Shelter: Housing benefit cuts will "change London for decades" http://bit.ly/as7ATZ
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