Housing benefit cuts will put 800,000 homes out of reach

These changes will mean that housing benefit claimants face the unenviable choice of debt, cutting back on basic living expenses or face the risk of homelessness as they are confronted with being unable to afford to pay their rent. In-depth analysis revealed a significant number of properties are no longer fully covered by local housing allowance for private tenants as a result of the changes which start to take effect from 1 January 2012.

The research shows that across the UK more than 800,000 homes will be out of reach to low income families. This is, due to measures that restrict housing benefit payments to rents paid in the cheapest third of lettings and the placing of absolute caps on the amount of housing benefit to be received by a household. Taken together, the measures restrict choice even further for claimants - in particular in parts of the country where the cost of rented housing is high.

In many cities and towns across the UK, there will be more tenants than available homes that are within the LHA rates for those who rely on housing benefit. The cuts will affect all four countries with an estimated 720,000 homes becoming unaffordable in England, a further 60,000 in Scotland and 30,000 in Wales1. The gap is most noticeable in London and the South East, where over a quarter of a million homes are now beyond the reach of housing benefit.

The capital cities in all four countries are severely affected – yet these are also the places where there are the most job opportunities. The changes will force people to move from where there are jobs to areas where there are far fewer. Those affected are not just the unemployed, in fact a slightly greater number are in low paid work and the majority are those who are unable to work (e.g. disabled, lone parents, pensioners and carers2).

Grainia Long, Interim Chief Executive of CIH said: “These findings are astonishing. 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.”

1. Northern Ireland will also be affected by these measures, but due to difficulties with the data sources we were unable to prepare comparable analysis for Northern Ireland.

2. Parliamentary question 2010 No. 31808 showed that as of March 2010 out of 1,015,000 LHA claimants 388,000 were unable to work (disabled, lone parents, pensioners, carers), 222,000 were on jobseeker’s allowance, 253,000 were in low paid work and another 151,000 not on a passport benefit (mainly pensioners and disabled).

3. Complete data available from the Guardian Datablog

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