Homeless charities including Shelter, Crisis and even the Residential Landlords Association (RLA) have all been campaigning against the Governments welfare reforms where the new LHA caps restrict the maximum LHA payable to between £250 and £400 a week, depending on the number of bedrooms, with a top limit of four bedrooms
Tenants claiming the Housing Benefit portion of the new “Universal Credit system” will be left on average £12 per week worse off.
This could mean thousands of tenants could face the prospect of either feeding the family and heating the home or paying the rent.
Many tenants are looking certain to experience real financial problems, mounting debt and possible eviction if they are unable to afford the rent. For those tenants who are already struggling to make ends meet, the loss in benefit income could prove catastrophic.
The most severe housing benefit cuts now coming into force will hit 62,500 single 25- to 35-year-olds, who will now only be eligible for £67.50 (or £53.45 if they’re under 25) jobseeker’s allowance (JSA) and only enough housing benefit to cover the cost of a shared room in a House Of Multiple Occupation (HMO), rather than a one-bed flat or studio.
They face the prospect of trying to find shared houses within the local community or relocate to another area. Long established private sector tenants over 35 with families, who rely on LHA to cover the rent could even face the prospect of their housing benefit being halved.
The charity Crisis commissioned the University of York to research and the results demonstrate that housing benefit / LHA acts as the main buffer between low-income and jobless households and homelessness. That buffer is now being dismantled and if further cuts remain unchallenged the gap between rents payable and benefits received will become unaffordable for countless families and individuals across the UK.
Crisis chief executive Leslie Morphy said: “Attacking housing benefit amounts to attacking those in our country least able to defend themselves. Much misunderstood, in reality it is all that stands between poor, often working, households and very bad housing or the horrors of homelessness. I urge the government to rethink before we do irreversible damage to the poorest in our country, and by extension to us all. Carrying on blindly down the current path is not only wrong but counterproductive on its own terms.”
Private sector landlords are also increasingly worried about their tenant’s ability to afford the rent and the increased likelihood of having to resort to eviction in order to protect their rental income.
Read Legal 4 Landlords previous articles on Welfare Reform