Cut rent not benefits

Cuts in housing benefit set out in the Budget will make the poorest pay for the housing crisis. Unaffordable housing costs are the problem not the level of housing benefit.

Leeds Tenants Federation calls on the Coalition Government to increase the supply of social rented homes to bring down the costs of housing.

 The ‘emergency’ Budget in June set out punitive cuts in the housing benefit budget that will result in an increase in evictions, home loss and further homelessness.  The impact of the cuts will be felt in the social housing sector as well as in private rented accommodation.

 But it is a housing shortage that is to blame for high benefit bills and the Government has no plans to tackle it.  Leeds Tenants Federation is calling for regulation of rents in the private sector to bring down housing costs and new investment in social house building to provide affordable homes.

The cuts in housing benefit mean that from October 2011 Local Housing Allowance will be set at a rate of 30 per cent of average rents in an area, instead of 50% at present. This will drastically reduce the housing that claimants can afford. In addition from next April there will be a ceiling on housing benefit no matter what landlords in  the local area are charging.

The most savage cut is the decision to reduce housing benefit by 10% for job seekers who have been out of work for more than 12 months.   Unemployed people will have to make up the shortfall from the £65 they get on Job Seekers Allowance.

This change, to be brought in April 2013 will impact on social housing tenants as well as those in private housing.

The Government has also warned that it will seek to reduce housing benefits to social housing tenants of working age who are thought to be over-housed.  Meanwhile Work & Pensions Secretary, Iain Duncan Smith has spoken of ‘tons of elderly people’ who should be encouraged to move out of their family homes.

The average payment of Housing Benefit is under £84 per week but the Government has used media stories of large pay-outs to justify these cuts . Local Housing Allowance already fails to cover the housing costs of over half of all claimants who have to make up an average of £100 a month out of their own money. 

The National Housing Federation has warned that thousands of unemployed tenants will face eviction when the full impact of these cuts is felt. The number of homeless people could rise by over 200,000 as a result.  

The Budget attack on housing benefit claimants appears to scapegoat poor tenants for the housing crisis.  Housing costs are unaffordable and cutting benefits will force tenants into the worst property, creating ghettos of deprivation, and inevitably boost the numbers of homeless.

The affordability crisis is caused by financial policies that aim to keep housing costs high and by a failure to build enough new housing.  The housing charity Shelter says that 67,000 new social rented homes need to be built each year to keep up with demand while last year only 30,000 new social homes were completed. But the first act of the new Coalition government was to freeze social housing building programmes and slash £230m from the Homes and Communities Agency’s budget. Forecast cuts of 25 per cent in government spending could mean a loss of 250,000 new affordable homes while 1.7 million families are still waiting for social housing and another 2.6m people are trapped in overcrowded housing.

Housing costs are already forcing millions into hardship with Shelter pointing to the two million families who already spend more than 50% of their income on rent or mortgage costs, while the use of credit cards to pay housing costs is rising.  Even rents in the social housing sector are in danger of becoming unaffordable for those in low paid work.  This is why housing benefit is needed: housing costs are too high. They are too high for people in work so cutting benefits will not solve the problem.

This Government needs to boost public house building programmes and take strong measures to tackle the affordability crisis in the housing market.  Regulation of rents in the private sector should be restored and tenants given more protection through secure tenancies.