Wednesday, 24 August 2016

CIH report evaluates welfare reform impact

Proposed welfare reforms present serious challenges for the south east while a benefit cap may not be enough to incentivise people to work, a new report claims.

Impact of welfare reform on the south east housing market – opportunity or hindrance? is a new report produced by the Chartered Institute of Housing South East which evaluates the effect of government proposals on the region.

The report, which is out today, says that the changes to welfare reform ‘present significant challenges for housing’ due to ‘limited investment for the sector in particular financing models that can work within the current economic environment’.

According to the report, the housing market remains ‘complex and volatile’ and despite government investment through the housing strategy, ‘many hurdles remain before the housing market can start to see a closer balance between demand and supply’.

Of all the reforms likely to have an impact on people in the south east, the report says that the £26,000 cap to benefits is likely to be the most significant and will hit more expensive areas in the region.

The report says: ‘The South East has over 250,000 people that are unemployed and a higher proportion that are economically inactive as outlined earlier. It is debatable if capping the benefit is enough to incentivise people into work, as that is also dependent on opportunities for employment.’

The report also says that plans for the ‘bedroom tax’ on underoccupied properties needs to be implemented carefully as there could be ‘negative outcomes’ for disabled people who need spare rooms for family members or carers.

Brighton and Hove, the report says, has the largest number of people (6,700) in one and two-bed properties to be affected by changes to local housing allowance - which result in rates being calculated on lower proportions of the rental market.

This change, the report argues, could alter communities as people are forced into ‘inter-regional’ migration in a bid to find cheaper housing.

‘This would pose problems for individuals and households as well as the economic development of these local economies,’ the report says.

However, the report does call on the sector to make a number of changes and begin to look for solutions instead of waiting for change to come.

The report says: ‘The critical element is the pace of the changes and the difficulties associated with implementation of some of the policies.

‘There is clear indication that some policies being introduced will be difficult to implement in practice or may, in the current climate, have greater adverse impacts for many households.

‘It is important that in these cases, the sector is quick to identify these disparities. It is likely that the sector will also need to be innovative in finding solutions that are not necessarily stimulated by government thinking, but that can be used to address issues on a long-term basis.’

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