Headlines: September 22nd, 2010

More than 82,000 households in London could lose their homes due to housing benefit changes. A survey of landlords by London Councils shows the real impact the government’s proposed changes to the housing benefit system will have on some 250,000 people in the capital.

Changes to Local Housing Allowance, the housing benefit for tenants renting privately, were announced by the government in June as part of a drive to stop people on benefits renting properties in expensive areas.

Landlords were asked in the survey whether they would cut the rent, refuse to renew tenancies or evict if tenants could not keep up with their rent payments as a result of the new caps. Approximately 60 per cent of landlords surveyed said they would not lower the rent by any amount if the tenant could not pay the full rent due to changes in LHA entitlement. If the shortfall in rent rises to over £20 per week, almost all landlords said they would evict the tenant or not renew the tenancy at the end of the period.

Over a quarter of landlords said they would decrease the number of properties they make available to people in receipt of housing benefit if these changes go ahead.

London Councils’ figures show that instead of forcing the market to accept lower rents, the new caps will lead to even fewer homes being available for rental by people on low incomes.

Those unable to keep up with their rents will either be made homeless, forced to move into overcrowded accommodation, or have to move to less expensive boroughs, putting pressure on services like schools.

As part of a wider package of recommendations to help those most affected by the changes, London Councils is urging the government to increase an existing hardship fund to £18 million from next year.

London Councils Executive Member for Housing, Mayor Sir Steve Bullock said: “Judging from the reactions of landlords in our survey, the government’s proposals will have a huge impact on people living in the capital. More than 82,000 households, many of them in work but on low incomes, could lose their homes. This could equate to as many as 250,000 Londoners.”