Tuesday, 24 May 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.’

Readers' comments (2)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up



  • Starter Homes' impact revealed

    8 December 2015

    The government’s flagship homeownership scheme will lead to a loss of up to 71 traditional affordable properties for every 100 Starter Homes built.

  • CIH warns of Immigration Bill impact

    3 August 2015

    New immigration check rules could cause landlords to “shy away” from letting homes to non-British tenants who are in the country legally, the Chartered Institute of Housing has warned.

  • Welfare reform Genisys

    10 July 2015

    The ‘”Chancellator’s” tax on children’ will hit ethnic minorities worse, says Derek Long

  • Government urged to improve welfare reform strategy

    29 May 2015

    Sweeping reforms to the benefit system have been hindered by failures to anticipate problems and over-reliance on assumptions, the government’s spending watchdog has said.

  • Northern Ireland welfare reform bill voted down

    27 May 2015

    Welfare reform legislation has been voted down in Northern Ireland, raising fears that a full package of benefit cuts could be introduced directly by the Westminster government.

IH Subscription