Wednesday, November 10, 2010

Unaffordable London

THE HOUSING charity Shelter last week warned that the Con-Dem Coalition plans to cap housing benefit at £290-a-week for a two-bedroom property or £400-a-week for the largest homes will mean many people on low wages or unemployment benefit or income support will no longer be able to live in London.
Housing benefit is claimed not only by the unemployed, pensioners and the disabled and sick – it is also claimed by thousands of Londoners in low waged jobs. And with benefit capped at £290-a-week most two-bedroom flats in the capital will be unaffordable for them.
Some Tory London councils are already warning councils outside the capital to prepare for a migration of low-income people arriving and seeking affordable accommodation.
Campbell Robb, the head of Shelter, said the cap meant claimants faced getting into debt as they would have to subsidise rents themselves.
The cuts were being done too quickly and could change the “very nature” of London.
Even the Tory Mayor of London, Boris Johnson, accused his own government of risking “Kosovo-style” social cleansing in London.
Ministers say the housing benefit bill has got out of control and people will still be able to claim a maximum of £21,000 a year – which they say is “more than the equivalent of what most working families have to spend on their housing costs”.
That is a lot of money but they forget that the money does not end up in the claimant’s pocket but in the landlord’s. The cause of the high housing benefit bill is greedy landlords who are raking in taxpayers’ money.
The answer is to cap rents, not benefits. Bring back the Rent Act.
Labour says it will force a vote in Parliament on the plans.
Campbell Robb referred to a study on the impact of housing benefit changes on London, commissioned by Shelter from the University of Cambridge.
It examined the impact of the cap, due to come in from April 2011, as well as other changes to the way rates are set.
He said early analysis had confirmed fears many London boroughs would become “largely unaffordable” for people on housing benefit from 2011, and a “significant further amount” would do so by 2016.
The research assumes rents will continue to rise by 3.6 per cent a year – and does not include all proposed changes affecting private tenants on housing benefit.
Robb said: “It is absolutely clear from what they are saying, is that over the next few years a whole swath of London, a whole series of properties – two-bed properties and bigger – will just become more unaffordable for those on housing benefit.
“In effect what will happen is the rents will be higher than the housing benefit that people get, so they would have to find their own money to meet the costs of rent before they have even started thinking about clothes and children and all those kinds of things.”
He said he was concerned the cuts could change “the very nature” of central London, and other cities – and “could mean tens of thousands of households forced from the centre, creating concentrations of poverty and inequality”.
And he said suggestions rents would come down if housing benefit was reduced were an “heroic assumption” when they had steadily risen over the past few decades.
A separate report issued by the TUC and the Fabian Society, based on a YouGov survey showed that more than half of tenants cannot absorb a housing benefit cut.
Forty-nine per cent in private rented housing and 66 per cent in social housing – would face financial difficulties if their income fell, such as through a cut in housing benefit, according to the poll.
While the government is cutting housing benefit and mortgage support, more than half the population want to see greater support from Government for renters and mortgage payers who get into difficulties with housing costs or who face losing their home.
TUC general secretary Brendan Barber said: “It is no wonder the housing benefit cuts are causing such difficulties for the Government, even within their own parties.
“Ministers want us to believe that housing benefit is going to what they would call work-shy scroungers, yet in reality only one claimant in eight is unemployed. The rest are mainly low-income working households, pensioners or the disabled.
“Then they tell us that people can absorb a cut in their housing benefit. This poll shows that most cannot. One in three renters already says that the stress of keeping up their rent payments has hit their performance at work.
“Thousands of people will have to uproot and move out of homes where they may have lived for years and have settled lives. Children will have to move schools.
“Lone parents carefully juggling work and child-care will lose support networks and have to give up work.”

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