Wednesday, 01 April 2015

Research casts doubt on benefit cut claims

Housing bodies are demanding a rethink of housing benefit cuts after research cast doubt on the justification for the plans.

The Chartered Institute of Housing and British Property Federation claim government assumptions that cutting benefits will reduce private rents could be flawed.

Ministers have argued that housing benefit costs have risen while private rents have fallen because private landlords are cashing in on the benefit system by hiking up rents they know will covered by welfare payments.

To address this, the government has introduced caps on the maximum amount of local housing allowance that can be claimed for different sizes of property.

The CIH and BPF research suggests this will not achieve the desired result. The bodies argue benefit payments have risen at a time when rents are falling because of changes in the make up of claimants.

Their analysis shows benefit payments fell in 61 per cent of areas in the 18 months after the introduction of the LHA in 2008, and suggests the overall rise could be due to an increase in the number of claimants in expensive areas such as London and the south east.

Grainia Long, interim chief executive of the CIH, said: ‘We have shown that LHA does not push up rents and so it cannot be used to bring them down again.

‘These cuts are going to cause a great deal of hardship to a large number of households without either the tax payer or households reaping the benefit.’

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