Monday, 28 July 2014

Capital’s boroughs prepare for lack of affordable private rented homes

Councils to move LHA claimants out of London

Councils in London are arranging to move local housing allowance claimants into accommodation as far away as Hastings, following cuts to housing benefit confirmed in the comprehensive spending review.

What's the benefit logo

London Councils revealed this week at a meeting of the work and pensions select committee that local authorities in central London have been block-booking private rented accommodation and bed and breakfast rooms in towns across the south of England.

The cuts to housing benefit, first announced in June’s emergency Budget, are predicted to hit private tenants in London hardest when they come into effect in April 2011. They include a cap on the amount of housing benefit payable per bedroom, and a move to calculating LHA based on the 30th percentile of rents in an area.

Nigel Minto, head of sustainable communities at London Councils, said: ‘Some central London boroughs have been doing block bookings in outer London because they know that they will not have the accommodation in the private sector.’

Mr Minto said the boroughs were booking rooms in towns such as Hastings, Watford, Slough, Reading and Luton because the rents in those areas are much lower than the average rates charged by central London landlords.

He said the councils were also starting to view bed and breakfast accommodation - normally used for short emergency stays - as a longer term solution to households presenting as homeless in their areas.

Families with children would be forced to remove them from school, and those claiming housing benefit as an in-work benefit would lose their jobs as a result of moving so far away, Mr Minto warned.

Research by London Councils has also found that landlords would not drop their rents if their tenants’ housing benefit is cut.

Alex Fenton, research associate at the Cambridge Centre for Housing and Planning Research, said he thought it was unlikely that rents in expensive inner-city areas would drop as a result of the cuts to housing benefit payments.

Inside Housing’s What’s the Benefit? campaign calls for fairer reforms to housing benefit. A petition expressing concerns about the government’s reforms had reached 1,418 signatures at the time of going to press

Readers' comments (35)

  • Fear & Loathing

    Wow! This just what Hastings needs!!!!

    The town has struggled for decades with high levels of poverty, unemployment & deprivation. What about some major investment to improve transport links, infrastructure & education? What about attracting some major employers?

    Sending hoards of new benefit dependent residents to live in cheap sub-standard private sector housing, with no jobs or prospects is just going to make an already bad situation even worse. Absolute madness!

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  • "Research by London Councils has also found that landlords would not drop their rents if their tenants’ housing benefit is cut."

    And how do they know, pray tell? They asked a landlord "would you put your £2000 pw rent down if we capped LHA at £400pw?" and they said "no". Quelle surprise. Of course they don't WANT to put their rent down. Who would. The fact is, however, that the London PSL market has been propped up and artificially inflated by LHA/HB. Landlords will charge what the market will bear. And if that market is artificially stimulated by State Aid in the form of LHA then in fact it is the State that sets the market rate. By refusing to pay such ludicrous sums, the State stops artificially inflating the market which will result in PSL rents falling to the level they should be. Landlords will have NO CHOICE but to reduce their rents as supply and demand will FORCE them to. So, no landlords don't want to reduce their rents, as this survey corrected identified (bears in wood, religious affiliation of the pope anyone?) but that's tough as they are going to end doing so anyway. Capping LHA is the best thing that ever happened to the London PSL market. Working people will now have a chance of getting PSL rents at affordable prices. And as for those who expect to be housed forever, for free in one of the world's most expensive cities without ever contributing anything, and taking properties away from those who do, well that's just tough as well. Plenty of space oop North in those boarded up houses we see on telly all the time where whole streets go for 50p. If you are not contributing to the London economy why do you need to live there at the expense of the State? Cleveland, Middlesborough, Hull beckon....

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  • This is far bigger than London or hasting. They are reducing the LHA ACROSS THE COUNTRY by at least 20% so even in the poorest areas who rent is less than £90 a week they are taking £18+ a week from this and expecting the tenant to make this up when they are only receiving £65 a week in JSA to live off

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  • The private rented sector in parts of London is doing very well, with a good supply of high-quality tenants in well-paid work - who cannot afford to be home owners as they might have in a previous generation. This means that benefit claimants will be pushed to the margins.

    Other parts of the PRS are simply riding on the back of better quality PRS stock and the rents are too high.

    Landlords will have to decide whether someone will be prepared to pay a high rent for a grotty little ex RTB property on an estate. At present the LHA rates will cover this, but once they are forced downwards the rent achievable on these "sub-prime" properties will drift towards the LHA rate.

    If Councils then steam in, as they did in the 90s, offering inflated PSL rates and other incentives to landlords, the market will distort again, and prospective tenants will have to apply as homeless in order to access the sub-prime but now lucrative PSL properties.

    Homelessness figures will rise and everyone will blame the cap on LHA, although the drivers are actually more complex.

    Reducing the onerous requirements of homelessness legislation would really help here. Unemployed applicants for assistance should be shipped out to cheaper areas, and rules on suitability of accommodation changed to reflect current economic circumstances. Otherwise all the projected savings will be eaten up with the sort of pointless litigation we saw in the 1990s.

    A removal of legal aid from housing cases would really help the LAs deliver a financially prudent service without fear of this waste and significantly contribute to the £2 billions of savings the MoJ needs to make. It could be replaced with a simple grant of say £5 M to Shelter, who could then prioritise cases to ensure that councils weren't simply flouting the law (as amended, one would hope). There would be a further check on frivolous litigation as costs would be awarded against claimants if they lost the case, unlike the position with claimants funded by the Legal Aid fund.

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  • Yep!

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  • It is simple if you are privileged enough to afford the high rents of exclusive areas you have a choice. If your poor, go away - we don't care where to, just go. Britain is a selfish society. I'm all right Jack who cares about anyone else.

    Thatcher, delivered well to to the privileged as did her successors Blair and Brown. Cameron and Clegg are continuing the good work.

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  • michael barratt

    A caring society dumping LHA claimants in Hastings?

    A total of 3,549 people claimed Job Seekers Allowance in February 2010, the highest number since 1997, according East Sussex County Council figures.

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  • Junior

    Must be some Human Rights laws. I know I lived in Southend on Sea, Essex due to the unemployment and so I moved down here. Since coming down here I not been able to land a job which is over a year now.

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  • michael barratt

    A caring society dumping LHA claimants in Hastings?

    According to the Rowntree foundation:

    Homelessness in England 1.77 per thousand homes

    Homelessness in Hastings 534+ per 1,000 homes

    The Libcon Government is unthinking uncaring and incompetent

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  • michael barratt


    A caring society dumping LHA claimants in Hastings?

    According to the Rowntree foundation:

    Homelessness in England 1.77 per thousand homes

    Homelessness in Hastings 534+ per 1,000 homes

    The Libcon Government is unthinking uncaring and incompetent

    Unsuitable or offensive? Report this comment

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