The housing law bulletin issued by Garden Court Chambers every week had some interesting links to housing benefit related items this week. Most interesting of all perhaps was a link to the Government’s response to the Work & Pensions Select Committee’s report on the forthcoming housing benefit changes.
Here are a few points I have picked up from the report
Reduced rent levels and the discretionary housing benefit safety net
The government expect the housing benefit cuts to have a knock on effect and reduce rent levels in the private sector.
They appreciate that many people will have to move and are providing additional money for discretionary housing benefits for this. You may want to read their response to this point in full:
The Government acknowledges that the caps will result in some tenants moving from the more expensive areas. However there is already a substantial annual turnover rate of about 40% in the private rented sector, and some of those who will need to move would have done so in any case. In all but three of the most central areas of London at least 30% of properties will still be affordable within Local Housing Allowance rates.
The maximum weekly rates of Local Housing Allowance provide a generous level of support. The maximum rate payable will be £400 a week which equates to annual support for housing costs at over £20,000 a year. A family paying an average proportion of their income in rent would require an income of at least £80,000 a year to be able to afford to pay this level of housing costs.
The question which follows this points out that a few highly publicised cases have rather distorted the public perception of the situation and seems to be ‘driving policy changes which affect a much wider range of people’. The committee also express concern that there will be a disproportionate effect on ethnic minority groups and disabled people.
The Government’s response to this is, more or less, that they are still doing research on it. Not a very satisfactory answer in the circumstances.
Concerns about the effect on retired people are answered by saying that the Discretionary Housing payments fund is being increased.
Increased evictions and homelessness
There is quite a long answer on the concerns raised about the possibilities of increased evictions and homelessness which the committee think may be greater than the government think. The government answer this by saying:
- They don’t agree
- They are putting in place extra measures and funding
- If landlords would only reduce their rent by £10 per week everything would be a lot better
- Local authorities will be able to pay rent direct to landlords (something they have been asking for, for a long time) if they agree to reduce rent to an ‘affordable level’
- The Localism Bill will allow Local Authorities to put people in priority need in accommodation in the private sector, even if they don’t agree to this (or rather if they refuse to agree, the Local Authority will not be obliged to find them somewhere else)
Comments expressing concern about the availability of accommodation in the private sector to meet the demand in the context of a shortage of social housing and high demand for rental accommodation are met, more or less, with the answer that they are working on it.
Those are the main points which jumped out at me. You may pick up on other points (you can read the response in full here).
It is clear however that great reliance is going to be put on the discretionary housing benefit. In this context you may want to look at the good practice guide which has now been issued and which you can see here.
Their other strategies appear to be:
- A belief that rents will go down to match the lower benefit rates
- Landlords will also reduce rent in return for getting paid benefit direct
I am not entirely convinced that landlords will be willing to reduce rents in a time of housing scarcity, but I could be wrong. What do you think?
Note that I will be talking to my March podcast guest Steve Perrons shortly about renting to housing benefit tenants. If you have any questions you would like me to ask him, please use the form on this page.