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guaranteed rental – Benefit caps to make 800,000 homes unaffordable

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guaranteed rental – Benefit caps to make 800,000 homes unaffordable

Caps to housing welfare payments that come into force this week will contribute to 800,000 private rented homes becoming unaffordable.

Research carried out by the Chartered Institute of Housing for the Guardian newspaper has analysed the impact of caps to the local housing allowance on homes across the UK.

It found 720,000 homes will become unaffordable to those on low incomes in England, 60,000 in Scotland, and 30,000 in Wales. London and the south east will be hit hardest, where a quarter of a million homes will become unaffordable.

The affordability changes are partly the result of local housing allowance caps that come into force this week. These restrict the maximum payment to between £250 and £400 a week depending on the number of bedrooms.

The research also looked at the impact of setting LHA rates according to the 30th percentile of local rents rather than the median, which will be introduced from April.
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Taken together the changes will mean there are more families claiming benefit than available homes in some areas.

Grainia Long, interim chief executive of CIH said: ‘Welfare reforms will see for the first time more people chasing homes than the market currently provides. The only feasible option for many families who want to stay in their communities will be to borrow more or to spend less on essential items such as food.

‘This could mean that more than 1.3 million private tenants face the New Year with dread, confronted with an uncomfortable prospect of homelessness or debt. Low income families could move to more affordable areas, creating benefit ghettoes, and resulting in increased social disorder and a breakdown in community cohesion.’

A DWP spokesperson said: ‘Early indications are that people are not moving out of cities in their droves to cheaper rural areas. For the vast majority of areas except the most expensive parts of inner and central London, at least 30 per cent of all private rental properties will be affordable.

‘Our measures will place a lid on spiralling rents and local authorities will continue to work with tenants and landlords to negotiate down rents, which will in turn help to keep properties within reach.’

Source: http://www.insidehousing.co.uk/care/benefit-caps-to-make-800000-homes-unaffordable/6519790.article

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