Thursday, 03 September 2015

Benefit caps 'will lead' to increased homelessness

A leading landlord organisation has warned that government plans to cap benefits are likely to lead to an increase in homelessness.

The Residential Landlords Association, which represents 16,000 private sector landlords across England and Wales, said plans to cap benefit increases would hit tenants.

Later today, MPs will vote on whether to approve legislation that would mean benefit increases would be capped at 1 per cent rather than going up in line with inflation. The RLA said such a cap would be unsustainable, leading to many tenants finding themselves unable to pay their rents and thereby facing eviction, even though landlords have seen a real terms cut in rental levels.

Based on figures from the government’s Valuation Office Agency, the average rent in England for the 12 months to September 2012 was 1.29 per cent higher than in the preceding 12 months.

Even with rents increasing by just 1.29 per cent, those on benefits facing a 1 per cent cap on the rise in their benefits will face added difficulties in affording their rent, the RLA claimed.

Alan Ward, chair of the RLA, said: ‘Almost a quarter of tenants in the private rented sector are in receipt of housing benefits, including some that are in work. While landlords have kept rent increases well below inflation this still wouldn’t be sufficient for benefit claimants facing a 1 per cent cap on the increase in their benefits.

‘Already before this measure is introduced, Shelter has reported that 1.4 million people are falling behind with payments on their rents or mortgages. The government’s reforms will serve only to increase the number of families struggling to cope.’

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