Saturday, 19 April 2014

Benefit reforms threaten Westminster families

The majority of families on housing benefit in Westminster will lose their homes under proposed welfare reforms, councillors have warned.

Changes to the local housing allowance for families in the private rented sector, announced in last week’s Budget, include limits of between £280 and £400 a week, depending on house size.

The changes are part of cuts aimed at reducing the soaring housing benefit bill by £1.8 billion a year by 2014/15, but opposition councillors in Westminster have calculated that 84 per cent of the 5,430 housing benefit claims in the borough would breach these limits.

Of the 59 families renting five-bedroom properties, only two would be making benefits claims under the new limits. For those in one-bedroom flats, 2,227 claims would be over the limits.

The councillors are warning that the cuts could force families to leave Westminster, and could even leave some people homeless.

Paul Dimoldenberg, leader of the Labour group at Westminster, said: ‘These figures show that over 4,590 Westminster families face a real crisis as the government takes away part of their housing benefit. This could lead to homelessness on a massive scale, causing families on to the streets or pushing them further into poverty.

‘We are calling on the council to make urgent representations to their friends in the government to think again on this housing benefit cut which could lead to huge social damage to long-standing Westminster families on low incomes.

‘In addition to being bad news for thousands of poorer families, this housing benefit cut will be expensive for the council generally as the cost of housing more homeless families in temporary accommodation out of Westminster will be enormously expensive.’

Philippa Roe, Westminster council’s cabinet member for housing, said the council welcomed the government’s cap on housing benefit.

‘When this new lower rate is in place we believe that rents will automatically fall as landlords will not be able to charge such high sums,’ she said.

‘Moreover, the new changes will not take hold until April 2011 and we have time to plan and forecast what the housing needs of Westminster will be.

‘For our part, we are doing all we can to increase the supply of affordable housing. But large families do have to be realistic about living in the heart of the capital and may need to be housed outside of the borough.’

Impact of local housing allowance limits in Westminster

Number of BedroomsNew LimitTotal ClaimsClaims Over LimitClaims Under Limit

1 Bed

£250

2801

2227

574
2 Bed£29016791458221
3 Bed£34069065634
4 Bed£40020018416
5 Bed£40069672
Total 54394592 (84%)847

Readers' comments (48)

  • And about time too. We all live where we can afford to live. I would love to live in the Bahamas or Hawaii but I dont have the money, so I live where I can afford to. No one needs to live at these sort of rents at taxpayers expense, its unfair and unaffordable.

    This may cost more in the short term while changes happen, but overall, this will save massive amounts of money that can be used better elsewhere.

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  • So, lets get this right - the proposed limit for a 3 bed house is £1,473 per month. I'm working, and live in a small 2-bed house with my Wife and 3 children. I have no hope whatsoever of being handed £1,473 per month to move to a bigger house.

    The limits are right, as is the Anon post at 9:19. We'd all love to live in an affluent area, but those who live in the real world have to live within their means.

    I could probably afford to move to a more suitable property for my family if my tax bill was halved, but thanks to waste like this, my tax bill is going up.

    The limits are too high, in my opinion. I'd drop them by at least 10%.

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  • I think most people are in agreement that LHA allows for ridiculously high rents to be charged, but the problem here will be these families in 5 bed houses for example presumably have (at least) 4 children. What's to stop them presenting themselves as homeless to Westminster and forcing them to put them up in B&B's at a cost of probably £300 a night for the whole family - will soon make the LHA figures look like small beer. I don't see anything that will force people to go elsewhere, the fact they're living in Westminster will mean with kids schools etc they can show a local connection.....

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  • Sidney Webb

    Why blame the tenants?

    Do you really believe that they went out of their way to find the highest rents possible?

    The blame is with the private landlords, charging excessive rents - but then they are only playing the system created. So the real blame is with those who created the system, and those who have enabled such exploitation of tenants and the public purse, i.e. those who removed the stock of social housing.

    What an irony for Westminster City Council!

    The solution - cap housing benefit to social or near social rent levels; insist that local authorities fulfil their duties to the homeless; fund social housing development.

    If Local authorities claim that they do not have the housing capacity then they must do something more constructive than pay private landlords huge sums from the public purse.

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  • Some of us have lived in central London all our lives from times when it was not salubrious. These are our communities. The complete failure of housing policy over 30 years means that there is a huge shortage of homes and private rents have risen high as a result.

    A sudden huge removal of HB means that these people will become homeless with a clear local connection to Westminster or Hammemrsmith or wherever. Many private tenants in central London who are on HB are elderly or have children and so would be in priority need. Westminster, having failed miserably to provide extra homes when the times were good, will no doubt then put them in temporary accommodation at even higher cost. Lives will be ruined and nothing will be saved.

    Do the 2x anonymous posters think poor people should be removed from all high rent areas, in which case we are talking about most of London. Where do they think these people should live? Even most outer London boroughs are over the new limits. I find their views callous and indifferent to the fact that real people are involved, often elderly. I suspect they are government stooges trying to justify this extreme policy which amounts to the social cleansing of poor people from inner London. Lady Porter would be proud.

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  • Harry - "What's to stop them presenting themselves as homeless to Westminster and forcing them to put them up in B&B's at a cost of probably £300 a night for the whole family "

    That's a good point, and a loophole that needs to be closed.

    Dave - "Do the 2x anonymous posters think poor people should be removed from all high rent areas"

    When hard-working families are struggling to make ends meet to fund rents for others that they themselves could never afford, YES.

    "Where do they think these people should live?"

    Somewhere where rents are at a reasonable level.

    "I find their views callous and indifferent to the fact that real people are involved"

    I am not callous, or indifferent, to the real people involved. Nor am I callous, or indifferent, (as you are) to the millions of hard-pressed families who are paying higher taxes to fund these rents.

    If I was offered the chance to move to another area of the country to be housed, at no expense to Myself, in a property that is suitable for my family, I would jump at the chance. I'd even jump at the chance of some help from the taxpayers to be able to buy a house with another bedroom - a loan would do, I'll pay it back!!

    I find your attitude to the wider community disturbing. They say that if you are offered something for nothing and it looks too good to be true, then it's probably a con.

    In this case, it's the hardworking, tax paying, families who are being conned and those in receipt of ridiculous levels of handouts to cover their rent who are getting something for nothing, that is (clearly not) too good to be true.

    The choice should be simple-

    Do you want a home that is suitable for your family?
    YES.
    Can you afford to pay the rent yourself?
    YES.
    Okay, you can live where you want.
    -----------------------------------------------------
    Do you want a home that is suitable for your family?
    YES.
    Can you afford to pay the rent yourself?
    NO.
    Okay, we have suitable homes in this town, that town, pick one.
    -----------------------------------------------------------------
    Welcome to the REAL WORLD.

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  • We are not a communist state where everything is owned by the collective, and I have no desire for us to move any closer to communism than Blair and Brown tried to move us.

    It is grossly unfair to expect those people on modest incomes who work hard to pay their rent/mortgage to pay taxes to fund rents that are in many cases vastly higher than their own rent/mortgage.

    It's not callous to expect someone to relocate when they are in receipt of a payment for which they offer nothing in return. People should not be made homeless, but they should be prepared to relocate to other areas of the country to remain in receipt of housing benefit.

    How can someone on housing benefit of over £1,000 per week ever be expected to get into work, especially when the attitude of many is that they won't work for £1,000 per month if they will lose an equivalent amount in benefit.

    The rent caps should be set even lower.

    I'd suggest taking the average salary in each region of the country, multiply that by 2.5 to work out an affordable mortgage figure.

    Compare this to the average house price in that area, and take the lower of this figure and 75% of the average house price in the area.

    Take that figure and work out, based on average mortgage rates, the weekly payment on a 25 year repayment mortgage.

    Set that as the limit.

    This would put those in receipt of benefits into the same affordability bracket as those who are struggling to buy a home. Capping housing benefit may even bring down house prices a little to help out those who are trying desperately to save up to buy a home.

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  • Dave Hollins - "Even most outer London Boroughs are over the new limits". This is total nonsense. These proposed changes would comfortably cover rental costs in the cheaper areas of every single outer London Borough. A quick search on Rightmove reveals 3 bed houses can be rented for under £1,200 a month even in Richmond (probably the most desirable/expensive of all of them). There are also 4 beds available for £1,600, only just within the thresholds but we are talking about one of the most desirable boroughs in London.

    Please check the accuracy of your comments before posting. I would agree wholeheartedly with Anonymous at 10.40, if you're not paying the money you can't expect to be given such a wide (and possibly any) choice about where you live.

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  • Dave Hollins - How would you define 'poor people'? It would seem that you are referring to HB claimants who are, in some cases, claiming 4 times my salary from their armchairs.

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  • So, the plan is we send thousands of families out of London to live in cheaper areas. What a great idea, that won’t drive rents up in those areas then will it. That isn’t the end of it though, Local Housing Allowance will be limited to the 30th Quartile and after one year on JSA you get a 10% reduction. Good that won’t lead to an increase in homelessness either then. This is a two for one deal higher rents and increased homelessness, the only good news in this is for those owners of B&Bs in Central London who will profit from the misery of others. The real test of this Governments commitment to the power of market forces is when they jack up the interest rates to help the economy and our anonymous friends find that they can not afford their mortgage and end up in the same B&B as the newly homeless tenant. I wonder how they will like that?

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