House of Lords Spark Housing Benefit Review

Latest landlord News by: Madalena Penny

Concerns about the impact of impending housing benefit cuts were voiced by peers last night at the House of Lords amid fears of the effect the legislation will have on vulnerable sections of society.

The debate followed Labour’s attempt to have the housing benefit reform measures thrown out by putting down a motion to have the secondary legislation voted down.  As a result, the Social Security Minister, Lord Freud is to establish an independent review to measure the impact on society caused by the housing benefit caps.

The caps, which are due to be enforced on new tenants from April this year and existing tenants in January 2012, have come under strong attack from housing welfare organizations, the private and social rented sector along with Labour Mps, who fear thousands could be made homeless as a result of the legislation.

Lord Freud defended the reform, criticizing ‘scare-mongering’ adding:
“Some of the estimates of the number of people that will be made homeless are quite frankly ridiculous.”

Lord Knight, who opened the debate said:
“These measures have serious implications for hundreds of thousands of honest, hard-working and vulnerable people.

“We should bear in mind that 4.7 million people receiving housing benefit in this country, two million of whom are pensioners on pension credit guarantee, half a million of people on jobseekers allowance and 700,000 are people in work in low-paying jobs.

“The Government’s own impact assessment of the regulations as a whole predicted almost one million families affected with an average weekly income loss of £12 a week nationally rising to £22 a week in London.”

“Critics unanimously agree that a change to a 30th percentile for LHA (Local Housing Allowance) calculations, along with the caps to housing benefit will result in a significant drop in income for hundreds of thousands of households.

“Of these, an estimated 269,000 will fall into what Shelter calls serious difficulty, unable to negotiate a reduction in rent they will have just three options – hoping their landlord will forgo a proportion of the rent, moving into cheaper and likely over-crowded accommodation or becoming homeless.”

Interim results from the independent review will be reported back to the Houses in mid 2012 and again in early 2013.