Benefit blow for private tenants

There was a time when private tenants had controlled rents, but landlords could receive generous grants as an incentive to maintain tenants’ homes. When Sir George Young was housing minister, the emphasis changed from bricks and mortar subsidies to deregulated rents, and his famous 1993 quote, ‘housing benefit is there to take the strain’, entered the phrase book.

When warnings that this was a recipe for esclating rents went unheeded, and the housing benefit bill did indeed shoot through the roof, the then Department of Social Security responded a year later with proposals for regional caps on housing benefit. John Battle, then Labour housing spokesperson commented that Tory housing policy had shifted the burden of housing provision into the private sector, but it cost an average of £14.24 a week more to place benefit claimants in the private rental sector than in local authority housing.

As Shelter pointed out at the time, the housing benefit bill had increased more than five-fold, while government spending on building social housing had halved in real terms from £13.1 billion to £6.2 billion.

Private tenants weren’t helped by 1998’s Community Charge (or poll tax). For most people this replaced domestic rates, but as most private tenants’ domestic rates were included in their basic rent, they alone ended up having to pay both.

After endless tinkering with housing benefit over the next decade came radical reform under the guise of the local housing allowance - the so-called ‘shopping incentive’. Despite problems many tenants on benefits face finding a landlord prepared to accept claimants, many did succeed in ‘shopping’ for the cheapest rent, sometimes at the price of overcrowding or poor conditions, but at least they retained the difference between the LHA and the rent. After capping this at £15 per week came the threat to reduce it altogether, and it is now due to end next March.

But this history of attacks on low income private tenants cannot be compared to the massive impact of the proposals to cap housing benefit announced in the coalition’s emergency Budget. Just a small number of tenancies in our own borough of Brent will be covered by housing benefit under the capped amounts, and no families on benefits will be able to live anywhere in central London. Whether families are in work now, or seeking work, they will not be able to afford the travel costs to where most jobs are, so how these measures are meant to create work incentives is a mystery.

In a Guardian article Sir George Young praised the government for its pledge to allow more scrutiny of legislation. Sir George, private tenants implore you to call for further scrutiny of the housing benefit changes before it’s too late.

Jacky Peacock, executive director, Brent Private Tenants’ Rights Group