Round the houses

Now the dust has settled from the Budget, most analysts agree that homeowners and aspiring home-owners were the clearest winners with the surprise cut in stamp duty.

What escaped many people’s notice was another proposed change that will make life even harder for the poorest private renters and could lead to an increase in debt, rent arrears and homelessness.

The chancellor announced in the Budget that the highest rents across the country are now to be excluded from the calculation of local housing allowance in each area. This won’t just stop people living in expensive properties; LHA rates will be reduced in any rental area which happens to include expensive neighbourhoods. Thousands of people will lose out, some up to a third of their benefits.

Recent Crisis research shows that 86 per cent of housing advisors say even a mere £5 reduction in LHA would make it more difficult for claimants to cover their rent. The Department of Work and Pensions’ own figures show 48 per cent of LHA customers already face shortfalls of an average of £23 a week.

For years, thoughtful commenta-tors have been saying that the British obsession with homeownership needs to be rebalanced. So it’s disappointing that, when cuts have to be made because of a recession partly caused by an overblown housing market here and in the US, it is the poorest renters who lose out.

With 1.8 million already on social housing waiting lists, the private rented sector is often the only option for those who cannot afford to buy and for many formerly homeless people. This change to LHA will, therefore, cause real harm. And as we enter a general election and the political parties scramble to prove their commitment to homeowner-ship, we must ensure that the voices of those who rent in whatever sector are also heard and are not forgotten.

Leslie Morphy is chief executive of Crisis