Thursday, 08 December 2016

Cap to affect family homes development

Government plans to increase the cap on benefits further could prevent housing associations from building family homes.

Treasury sources confirmed chancellor George Osborne is mulling reducing the cap on benefits rolled out nationally this week from £26,000 a year to £20,000 a year, if the policy successfully increases employment and cuts the welfare bill.

Sam Lister, policy and practice officer at the Chartered Institute of Housing, said: ‘The main concern for landlords, particularly those around the London area, is whether they can develop large family homes.

‘In the long run you could have a severe shortage of that type of property, and that drives the rents up for everyone.

‘I guess in the long term you would be looking at there not being any accommodation in these areas suitable for large families, and people migrating outwards.

‘Lenders want to know their income stream is secure and they want to know if there is a risk. And if they won’t lend, then housing associations can’t provide these homes.’

Brendan Sarsfield, chief executive of Family Mosaic, said: ‘When the cap came in [to four boroughs in April] we stopped developing four-bed units.

‘We had a very large number of them already, and we didn’t want to increase our exposure to rent arrears.

‘If [the cap] goes down to £20,000 it calls into question whether three-bed units will be viable. At the moment housing is dictated by benefit policy, and we desperately need a housing strategy.’

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