Councils told to look again at large homes ahead of benefit cap
Families pushed to downsize to save cash
London families using housing benefit to rent large private homes will be pressured to move into smaller homes or negotiate lower benefit rates over the next few months.
The Department for Work and Pensions ordered an urgent inquiry into local housing allowance rates for homes with more than five bedrooms after a family in Ealing, west London, was recently found to be living in a seven-bedroom house costing £2,875 a week.
An inquiry carried out by the department has shown there are 16 similar cases, all in London, of housing benefit paying for high levels of rent for large homes. The homes are understood to collectively cost the taxpayer around £2.5 million a year.
Work and pensions secretary James Purnell announced last month that local housing allowance rates would be capped at the five-bedroom rate for each area, a change that will come into effect by April. He said this week: ‘I am asking councils to work with us ahead of the April rule change, as this situation has to stop.’
A department spokesperson said: ‘Those few authorities who may not have been acting in the taxpayer’s best interests should help customers in excessively large, expensive houses to downsize or negotiate a lower rent ahead of the cap coming in.’
‘Good councils should be thinking about this issue now rather than waiting until someone comes to them saying they can no longer pay their rent because [local housing allowance] will no longer cover excessively expensive properties.’
Sam Lister, policy officer at Chartered Institute of Housing, said there needed to be further reform of the benefit system ‘or landlords will have to show a great deal of discipline in what they are prepared to charge’.