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Housing benefit caps put 750,000 at risk of losing home

Wednesday 28th July 2010

More than 750,000 people are at risk of losing their homes in London and the south east because of caps being introduced on housing benefit from April next year, according to a campaign group.

The National Housing Federation said benefit cuts could effectively force low income families out of large parts of London and the south east.

It said its research showed 425,000 people in London were at risk of losing their home, while 326,250 people in the south east were at risk of losing theirs.

It added that the impact of the housing benefit cuts was likely to lead to the highest number of people ending up homeless in Britain for more than 30 years.

The Federation is calling for the Government to set up a poverty commission to look at the impact of housing benefit cuts on the poor.

The scale of problems caused by the proposed housing benefit caps is revealed on the day the Government prepares to publish an impact assessment of the changes introduced by the Chancellor during the Budget.

The Federation said it was vital ministers acknowledged just how catastrophic the changes to housing benefit could be.

In his Budget, the Chancellor imposed caps on housing benefit of £400 a week on any property with four or more bedrooms, and £250 a week for a two-bedroom home.

The Chancellor also decided that instead of people on benefit being able to claim rent of up to half of the local market average, they will instead be only able to claim up to one third of the local market average rent.

And unemployed people who claim Job Seeker’s Allowance for 12 months will also see their housing benefit fall by 10% under the controversial plans.

The result of the introduction of caps on housing benefit and the ruling that people will only be able to claim up to one third of the local market average is that thousands of lower income families will not be able to afford to live in many parts of London – such as Islington, Camden and Southwark – and the south east.

While many people will look to move to cheaper accommodation, there will not be enough housing in parts of London and the south east within the cap levels to go around. Many others will quickly fall into arrears and be evicted.

In some cases, local authorities may be legally obliged to house those evicted – with some ending up in expensive bed and breakfast properties. In other cases, councils may not have to re-house them and they could end up on the streets.

There are currently around 140,000 people homeless in Britain, which is down from a peak of 174,503 people in 2003 – the highest figure since modern records on homelessness began in 1980.

The Federation believes that the combined effect of the Government’s raft of proposed changes to housing benefit could lead to up to 750,000 people being at risk of becoming homeless.

Federation chief executive David Orr said: "If the Government presses ahead and introduces harsh housing benefit cuts more than 750,000 people would be at risk of losing their home.

"The housing benefit caps could see poorer people effectively forced out of wealthier areas, and ghettoised into poorer neighbourhoods.

"Some people affected by housing benefit caps may successfully find a home in cheaper areas, but many will end up in expensive bed and breakfast accommodation, while thousands will simply become homeless.

"Unless ministers urgently reconsider these punitive housing benefit cuts, we may see more people sleeping rough than at any stage during the last 30 years.

"An independent poverty commission should quickly be established to assess the impact cuts to housing benefits will have on the poorest."

He added: "For many people, particularly those with disabilities, moving could be an enormous upheaval. It will also disrupt the education of thousands of children.

"The resulting impact on people’s lives would be huge – as would the cost to the taxpayer."

Have your say on this story using the comment section below

Mike Jones

View Comments 2 comments

Posted By Arthurian on Thursday 29th July 2010 04:34:06
Why SHOULD the 'Working Poor' [Especially with one or two kids]Subsidise those with large families [Many who have not worked] and are living in Mansions in Prime London Addresses?

Posted By David Hoole on Wednesday 28th July 2010 03:10:27
I will be glad if it stops recent migrant families from living in fashionable inner London at public expense, when indigenous people would struggle for several generations to get there, or maybe never could. Some of the unemployed are far too comfortable and need to get real about who is,temporarily, providing for them.