Thursday, 28 May 2015

The year of reckoning

From: Inside edge

I’m kicking off my blog with five key questions for 2012. There is only one place to begin.

Two days into the new year and already it’s clear that 2011 was merely a dress rehearsal for the changes to come.

Last year was dominated by battles over a welter of legislation and cuts that will dramatically transform the prospects of anyone living in or looking for rented housing. 2012 sees those changes start to take effect across the country.

Chartered Institute of Housing research reported in The Guardian today concentrating on just two of the changes makes the point only too clearly.

The CIH estimates that bedroom caps (starting yesterday for existing claimants) and 30th percentile (from April) restrictions will make 800,000 private rented homes unaffordable for anyone on the local housing allowance.

As this map shows, the effects will be greatest in inner London. In Westminster 20,700 homes will disappear, leaving 8,700 families on LHA chasing just 3,200 homes.

But the effects ripple out to supposedly more affordable Outer London, with 5,500 homes disappearing in Croydon and 16,900 families chasing 9,600 homes and 5,400 going in Newham to leave 14,400 families after 7,800 homes.

And this is not just an issue for London or even the South East. In Birmingham, 34,500 families will be left chasing 23,300 homes, in Liverpool 21,000 families will be after 12,000 homes and in Glasgow 14,800 will be competing for 13,600 homes.

In total 1.3m private tenants around the country are facing a choice between cutting spending on other essentials, going into rent arrears or moving to a cheaper home or a cheaper area. Or perhaps between staying where the work is and making up the rent shortfall or moving to where there are fewer jobs and having the rent paid in full.

That in turn will have a knock-on effect on cheaper areas that the CIH warns are at risk of becoming benefit ghettoes. Interim chief executive Grainia Long warns that the whole of the South East has only a few low-cost places like Margate and Hastings that could face increased social problems and a breakdown in community cohesion.

The Department for Work and Pensions counters that ‘early indications are that people are not moving out of cities in their droves to cheaper rural areas’ and that ‘for the vast majority of areas except the most expensive parts of inner and central London, at least 30 per cent of all private rented properties will be affordable’.

However, note the careful choice of words employed there - I’m not sure anyone has ever suggested people would move in droves to rural areas, more that they would be uprooted to cheaper urban ones.

And this study reflects only two of the cuts that start to bite this year. From yesterday, the age threshold for the shared accommodation rate was extended from 25 to 35. The DWP estimates that 62,500 people will lose an average of £41 per week as a result. As Crisis points out, that will almost double the number of people on the shared rate and force tens of thousands of people in self-contained homes to look for shared accommodation that will be in short supply in most areas and simply not available in some.

Exactly how all this will pan out remains to be seen. Some tenants and landlords will adapt and find ways to cope. Perhaps much of the problem will be hidden in overcrowded homes and yet more rented sheds and garages. But it’s hard to believe that these cuts will not add to an already growing problem of homelessness and lead to escalating pressure on public services in areas that become benefit ghettoes.

And all this will be happening at the same time as last year’s cuts in housing investment reduce the supply of affordable homes, unemployment is rising, household incomes are falling and changes in the Localism Bill allow local authorities to discharge their homelessness duty into a private rented sector with thousands more tenants than there are homes.

So 2012 will be the year of reckoning - with more cuts to come in 2013.

Readers' comments (33)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

IH Subscription