LHA cuts to lead to 'benefit ghettos'
Plans for a tough new local housing allowance regime risk plunging people into arrears and creating benefit ghettos, delegates at the Chartered Institute of Housing conference have warned.
As part of a package of reforms to the housing benefit system, local housing allowance, which is paid to private renters, will be limited to between £280 and £400 a week depending on property size. Housing benefit will also be cut by 10 per cent for those who have received jobseekers allowance for more than a year.
During a Budget analysis session in the Queen’s Suite, Sue Witherspoon, head of housing at Havering Council, said several authorities in the capital have no private rents below the cap.
She said: ‘The implication for a borough like Havering is we will have a flood of people moving in because of the lower costs.
‘It will lead to a ghettoisation of benefit claimants.’
Simon Harris, chief executive of Stoke Citizens Advice Bureau in Staffordshire, said that the reduction in allowance for long-term jobseekers will ‘plunge people further into rent arrears’.
Michael Newey, group chief executive of Broadland Housing Group, said: ‘I have a very despondent view about where these jobs are going to come from for our tenants.’
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Readers' comments (9)
Anonymous | 24/06/2010 9:22 am
I think everyone would agree it will increase rent arrears across the sector. Does anyone yet know the details of how this is supposed to work in practice and the underoccupying benefit restrictions for the Social housing sector and when it will start from as we need to be prepared?
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Anonymous | 24/06/2010 10:24 am
Point taken on the Ghettoisation, however there are too many unscruplious landlords that charge ridiculous rents and are making a fortune out of properties that are unfit to live in. This has a negative impact on those who work and want to rent in the private sector as rents are usually well above the LHA rates.
Councils should have been allowed to use the 'right to buy' money to build new stock instead of it going into Central governement coffers, infact it should have never been introduced, how is it that ex LA properties (rightmove) be sold on for nearly half a million pounds! Absolutely Scandalous, not the fault of the person selling it but for those who have to work hard, its hardly an incentive to get up and go to work each day!
Strangely enough this mess was created by the last Conservative Govt under Thatcher and I have no doubt they will be the cause of many more social ills in the coming years
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Anonymous | 24/06/2010 2:22 pm
Not quite sure what the issue is here. If you look anywhere in the country apart from central London you can easily house a family for £400 a week. In many places this is still excessive. Does this mean that the whole of the UK will become a ghetto if tenants in receipt of housing benefit are forced out of their £1000 a week Notting Hill pads?
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Dave Hollins | 24/06/2010 4:10 pm
"tenants in receipt of housing benefit are forced out of their £1000 a week Notting Hill pads?"
Nice bit of prejudice and ignorance in operation there. I bet you also don't like the fact that some of them are black as well.
Just as the poor are paying for the financial crisis created by the rich, the Tories/LibDems will make sure that it is poor tenants who will pay for the housing crisis that has created high rent levels across the whole of London.
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Harry Lime | 24/06/2010 4:17 pm
Forgive me Dave, but your "i bet you also don't like the fact that some of them are black as well" comment is also prejudiced - after all, you don't know the poster - how ironic......
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Dave Hollins | 24/06/2010 7:08 pm
Harry - how right you are, I don't know the poster - but I do know the type.
But I shouldn't be so intemperate. I should keep that for the Tories and LibDems who are going to ruin the lives of many private tenants on low incomes or benefits. It's not just a central London phenomenon, the cap will impact on huge parts of London, like most of Brent for example. That can hardly be considered as somewhere posh where poor people shouldn't live.
If there are say 12 boroughs where the cap is a serious problem, which is highly likely, then the numbers affected will be many tens of thousands.
The other HB proposals will take longer to have an impact, but social tenants in all parts of the country will gradually find that HB is covering a smaller share of their rent. that seems to me to be a really bad thing.
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Joe Halewood | 24/06/2010 9:43 pm
Supported Housing anyone?
Many rents nationally not just in the capital are in excess of £280 especially in homeless hostels and DV refuges. So will we see women fleeing DV and their children being evicted for rent arrears created by the 10% cut?
You can bet that wasnt thought about by knee-jerk Osborne was it?
What about the thousands of vulnerable ALD or MH tenants living in the Supported Living Model of care who have high rent levels. (and yes they are available for work as part-time work is actively encouraged as therapeutic and beneficial!)
Anyone still think Osborne has thought this through??
So do any of the commentators here think this is still linked just to London now?
The 10% HB underfund affects many of the most vulnerable nationally in supported housing and not just the general needs tenants being ripped of by PSLs.
Sorry Mrs, I know youre fleeing DV but our risk assessment says youve been on JSA for 11.5 months and so you cant afford to stay here - Or - Sorry Mr and Mrs Smith, we understand that you have been flooded out of your house but as youre on JSA you cant afford to live in our homeless families unit!
Anyone know where the extra funding is coming from to pay for the massive housing related support need this knee-jerk policy is going to create? You mean there isnt any so the problems intensify and those affected will need even higher levels of support and care?
Anyone still think policy is thought through?
David, do you think we will score a few brownie points with the Daily Mail if we restrict all those nasty breeding immigrants to have their benefits cut? Oh yes George sounds good - Bungle, Zippy what do you think!!!!
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Anonymous | 28/06/2010 11:09 am
Dave, you seem to have missed my point. Explain why, as a worker I deserve £30k a year to support my family but as a non worker i could have been earning upwards of £75k in HB alone if i didn't bother? By the way, i'm not a racist and i don't read the daily mail.....i can't afford to buy a copy!
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Joe Halewood | 28/06/2010 11:30 am
Will it create benefit ghettos? Ive posted elsewhere on here that private landlords will simply adapt properties to get an INCREASE in LHA / HB income.
Simply, if a 4-bed realises a max of £400pw then converting the 4-bed into 3 or 4 x 1 bed properties will realise £840 or £1120 per week.
Still thats going to be interesting in the more salubrious parts of the capital isnt it? Instead of having 4-bed houses it will become bedsitland as PSLs chase profit and overall massively increase the HB bill at the same time!
The council tax bill will also increase as will CTB to the public purse given that 4 x 1bed CT is far greater than 1 x 4-bed CT.
Osborne and his Tory cronies must realise this will happen and PSLs will substantially increase their HB / LHA take. It will also fuel yet another buy-to-let boom in the capital making it even more inaffordable to live there .....
Time for Osborne et all to prove their incedulous claim that they are acting in the "national" interest and limit LHA to social housing rates and prevent this further daylight robbery of the publi purse by PSLs
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