Benefit reforms 'will increase arrears'
Housing benefit reforms will leave private tenants struggling to pay their rent, according to research carried out by Crisis.
The homelessness charity is warning plans to change local housing allowance rates will result in cuts for tenants, while the current system does little to encourage them to return to work.
The charity surveyed housing benefit claimants and advisors, and discovered reductions of as little as £5 per week could cause serious problems. Eighty-six per cent of advisors said a £5 cut would make it difficult to pay the rent, while 54 per cent said cutting weekly rates by £15 would mean it was nearly impossible for tenants to avoid slipping into arrears.
Meanwhile, 64 per cent of unemployed claimants told the charity they were worried or very worried about what could happen to their housing benefit if they found work.
The Department for Work and Pensions is trying to find a way of cutting the soaring housing benefit bill, which stands to reach £20 billion next year. One of its plans, mooted in a consultation which closed last week, is to change the way LHA rates are calculated.
Crisis is concerned the various options for recalculating LHA rates will hit tenants hard, as all will reduce the median rent on which the benefit is based, subsequently cutting the rates payable to claimants. The charity is demanding the government carefully model the effect of any new method for calculating LHA rates before implementing it.
Leslie Morphy, Crisis chief executive, said: ‘We need a system which works for tenants and landlords and where work pays. And we certainly don’t need the disasters of increased poverty, debt and potentially even homelessness which a reduction in benefit rates from changing how they are calculated would bring.’
A DWP spokesperson said: ‘We’ve just consulted on proposed reforms to the housing benefit system and are now carefully reviewing the responses supplied by stakeholders such as Crisis. We want a system that acts as an incentive to getting into work and at the same time is fair to the taxpayer and families in need.’
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Readers' comments (12)
AC Preston | 03/03/2010 12:51 pm
So do crisis intend to allow private landlords to continue using property as a cash cow?
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Melvin Bone | 03/03/2010 2:13 pm
'AC Preston | Wed, 3 Mar 2010 12:51 GMT
So do crisis intend to allow private landlords to continue using property as a cash cow?'
Can you explain what your 'statement' has to do with the various options for recalculating LHA rates?
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AC Preston | 03/03/2010 3:08 pm
private landlords are aware of what they are able to charge and push their rents to the limits of this.
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Melvin Bone | 03/03/2010 3:49 pm
Are you not aware that most private landlords rent to people who are not on benefit?
If you follow the LHA rates throughout the various BRMAs in the UK you will see that as well as going up LHA rates also go down...How can this happen if the landlords are as you state 'able to charge and push their rents to the limits'.
I think you are looking for a conspiracy here that does not exist.
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ringo smith | 03/03/2010 3:52 pm
AC Preston is absolutely right. Landlords can access the LHA direct website and state the rent they know the prospective HB tenant is entitled to. I work for a LA and many agents do the same thing. In reality tenants cannot 'shop around' for a good deal as LHA was intended to do. The bottom line is there can never be a 'fair' way for people to claim Housing Benefit, especially in London. Rents are high, full stop. If the government want to use PRS as a housing solution to assist homelessness then someone has to pay the going rent for London properties, it is that simple. If not the homelessness issue will always be a problem. I don't see anyone building any council houses in London! Only 'affordable' housing with tiny box bedrooms,open plan kitchen living rooms and huge service charges, Also called shared ownership! You can usually recognise these 'apartments' because they are built next to railway lines, on roundabouts, busy one way systems etc etc. So much for building family housing next to open green spaces! You got to love discussing housing issues in London! Could talk about it forever!! lol
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AC Preston | 03/03/2010 4:42 pm
In my experience as a long time private tenant I have seen this in practice. Private landlords fall into 2 camps those willing to take people on LHA and previously HB and then the "NO DSS" brigade. After months of house hunting you notice that the majority of properties are at the same rent, give or take a few quid and the "NO DSS" adverts have varied rents. This is something I have been aware of long before working in housing.
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Melvin Bone | 04/03/2010 9:39 am
Do you propose that we do not tell anyone how Housing Benefit is calculated and keep LHA rates secret?
Not sure that would be entirely legal.
I assume you have an alternative proposal to LHA?
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ProMan | 04/03/2010 10:02 am
AC - of course rents for properties who will accept LHA are all roughly the same, LHA is calculated on number of beds and postcode, if I had a tiny one bed next to a large one and knew I could charge the same LHA rent, why the devil wouldn't I? (nb I am not a private landlord, simply illustrating the point) properties available from the (as you call them) no DSS brigade vary due to size, location, decorative condition, furnishing, floor level, garden, type of property, bills incl, ctax incl etc.......
Like melvin i can only see a broken pencil when reading your posts.
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alex | 04/03/2010 4:27 pm
Can I add another dimension to this argument; government should increase employment to reduce poverty not just rob one to pay another. Rather than bailing out milliners (banks) if the government has spent the money on infrastructure we will not be arguing about this now.
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AC Preston | 04/03/2010 4:54 pm
The point is that LHA levels are pretty much the benchmark. When setting these levels they should take account of this and lead the market rather than being dragged headlong into emptying the public purse.
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