You’ve probably already seen this, but new upper limits on housing benefit rates are to be introduced from next April (2011).
For a three bed house, the upper limit will be £340 per week
For a four bed house, the upper limit will be £400 per week
LHA will be limited to between £250 and £400 a week depending on property size. LHA rates will be set using the bottom 30 per cent of rates instead of the median and they will be linked to the consumer prices index rather than the retail prices index, leading to smaller increases.
In London, this is likely to have a very significant impact on those renting privately (and potentially on those in temporary accommodation, whether provided by LA, RSL or a private leasing arrangement, where rents charged are ridiculously high, if that gets changed too.)
In addition, from April 2013 anyone who has been on Jobseekers Allowance for more than 12 months will see a 10% reduction in housing benefit. According to Grant Shapps this is designed to target people “choosing not to work as a lifestyle thing”.
For Shelter’s response, see here.
Meanwhile, Iain Duncan Smith is proposing that new steps should be taken to ‘free up’ under-occupied social housing:
We have tons of elderly people living in houses which they cannot run and we’ve got queues of desperate people with families who are living in one and two-bedroom houses and flats,.
He also raised proposals for Council tenants in areas with low work to be able to move to areas with high work, apparently by putting such people at the top of the housing list in the new area. After all, areas with high work availability are also notorious for the amount of unoccupied social housing in those places.
are you sure the limits also apply to temporary accommodation provided by LAs, not been the case with LHA allowances in the past?
No, not sure at all – no such details yet. Post amended to make this clear. (Told you I had a cold…).
It also looks like they are very quietly getting rid of the 5 bedroom rate too.
And these limits and the re-introduction of the unreasonable size deduction just fundamentally undermine the whole purpose of the LHA.
Remember Edwina ‘Cruella de Ville’ Curry’s changes to B&B payments? This is going to be just as bad.
This chicken has been waiting to come home to roost since the repeal of the Rent Acts which simply shifted rent subsidisation from landlords to the State.
do we know if there is any allowance for those on ast’s which will terminate after april? my (very imperfect) understanding of lha was that amounts only got adjusted downwards when a tenancy was renewed. (is that correct?)
and does this just do away with lha?
on the freeing up point, do they propose to achieve the intended result by modifying (ending?) security of tenure? presumably they would add a new ground for possession by social LL equivalent to requiring the property for redevelopment if providing suitable alternative accomm; and modify the definition of suitable alternative accomm specifically to include smaller.
At this point, it just looks like encouraging councils to pursue downsizing more vigorously, presumably with incentives, as some already do. No mention of making it a basis for a ‘suitable alternative accommodation’ possession claim. But who knows what may come from the fevered mind of Mr Duncan Smith?
The suitable alternative accomm issue may well be a minefield. If only because of the increased scarcity of larger properties.
PSLs with 4 or 5 bed properties realising £400pw as opposed to their conversion to 3 or 4 x 1 bed properties at £280 – or £840 – £1120 pw explains.
Anyone know whether the 10% cut applies to net rent or gross rent yet?
Anyone know whether it applies if claiming two rents? (eg a large family flooded out in temp accomm that requires two rooms and two rents in say homeless families units)
A blog on IH today is very interesting as it quotes Hansard.
Mark Field (Con, Cities of London and Westminster)says:
“‘Many would welcome the government’s implementing the new caps, and mitigating the associated risks. In particular, places such as Westminster need the guidelines around local connection to be changed,’ he said. ‘Under the existing guidelines, local authorities affected by the caps are required to try to house people in their vicinity. I think that Westminster city council is particularly concerned that the courts will find against it if it tries to house families out of the borough, leading to additional costs, and more uncertainty and family disruption.’
On the one hand ‘we need to ensure that local authorities can, to an extent, house out of borough when it has not proven possible to find temporary accommodation in the area at the new capped rates’. On the other, ‘the measures should primarily be about fairness, with the hard-working being rewarded and the truly vulnerable being properly and fully protected’. ”
So temporary accommodation is to have the cap applied then!
Westminster Council (and H&F) expect a change in the law on local connection!!!!
In response Karen Buck (Lab, Westminster North) said “All the work on homelessness prevention had relied on diverting people into the private rented sector. ‘Now we are saying to those people that we can no longer put them in the private rented sector in most places, so what will happen? They will be homeless. They will make an application and, under present law, there is a duty to accept them as homeless, so what is the answer?
To which Mark Field replied:
‘The coalition government will change the law. I predict that they will change the law so that local authorities no longer have a duty to house homeless applicants; Westminster council has made it clear that it supports that position, as has Hammersmith council. Local authorities could not house those people because if they did, the entire policy on housing benefit reduction would be shattered. Therefore, the Government will change the law to allow all homeless households to be housed only in the private rented sector. They will remove all forms of local connection.”
The political and housing implications are very clear from this – Legal consequences and likelihoods anyone?
Apologies for the length of this comment – the full article can be found at http://www.insidehousing.co.uk/tale-of-two-cities/6510516.blog
An extremely interesting debat in Parliament the other day reported in Hansard and commented upon at IH
http://www.insidehousing.co.uk/tale-of-two-cities/6510516.blog
It seems (a) Temporary accommodation will be included in the caps; (b) presumably the cuts may well apply here as many are in temp accomm for greater than 12 months and need to be on JSA to afford to reside there.
However far more interesting is (c) it seems the Tories are planning to legislate out local connection so that Westminster etc do not have to accommodate homeless persons.
The Hansard debate is very revealing indeed!
Thanks for both comments, JH. While the remarks are from a backbencher, and clearly one with a lobbying mission on the part of the constituency LA, this is a worrying suggestion/indication.
I saw Grant Shapps speak at Harrogate last week and he didn’t hint about any new legislation in relation to homelessness. My general impression was that reforming housing law (other than reducing the housing benefit bill and abolishing the TSA) was at the very bottom of their list of priorities.
Their hand may be forced as chaos hits, but at the moment Mr Shapps sounded like it was all going to be swept under the carpet.
I note that the City of London maintains social housing outside of the City, so it can’t be that hard to achieve.
mark field said: ‘The coalition government will change the law. I predict that they will change the law so that local authorities no longer have a duty to house homeless applicants;’
was he imprecise or is that a hint that they are simply going to remove the duty altogether?
it really can’t be what he meant, but how do we get from that to getting rid of local connection as an issue?
fortunately the current splits on all sides are making me believe that this nonsense will not continue for the full term or anything like it. though with luck karen buck will be in parliament for a long long time. i have personal experience of the work she has done on behalf of individual constituents on a range of issues including housing and homelessness. she’s a bloody good mp (and i would be forced to say that if she were a tory – albeit through gritted teeth!).
ok! so i have read the article. the ‘quote’ that begins my comment seems not to be what mark field said but rather karen buck’s interpretation of his words. so perhaps less scary than it first seemed to me.
also resolves how he ‘got’ from there to local connection cos he didn’t.
ah well.
If housing benefit allowances were cut down gradually and selectively it would act as a much needed anti-inflationary measure. Landlords would have to drop rents or have empty properties, especially at the cheaper end of the housing market. This in turn would be of benefit to essential but low paid workers such as nurses, who find it increasingly difficult to rent in central London.
In my experience there is also resentment when those who work share HMO accommodation with those who lie in bed or sit in cafes because of vague feelings of inadequacy or depression.
Hi I am currently working and cliaming a small Rent rebate on a 4 bed house social housing there are 2 of us living here I have tried to move and they keep telling me I have to find my own exchange what will be my situation re my small help towards my rent I work full time nad have never been on Job seekers will I still lose my benefit because im under occuping?
Hi,
I’m sorry, but we can’t give advice on individual’s situations via the blog. I’d suggest finding an advice centre or CAB to discuss your situation. I’m surprised that your social landlord isn’t biting your hand off to get hold of a 4 bed property on a transfer, by the way, but then social landlords behaviour surprises me a lot of the time.
Has anyone in the government thought about how the so called “under-occupation” affects high rise flats where there are a large number of 2-bed flats which cannot be rented out to anyone other than single or couple – due to height of the block etc?
I live on the 15th floor in a 2-bed flat – well if you can call the second bedroom a bedroom – it makes a good storage room, but would be a very tight squeeze for a 3ft single bed
I’m not sure which family Mr Duncan Smith has in mind to take my flat, when I get turfed out due to a £60 a month bill for the bedroom tax – which needless to say I cannot pay
It may be that the additional room rate is restricted to ‘more than one’ additional bedroom, depending on the progress of the bill though Parliament. Otherwise, yes – a ridiculous proposal all round. Otherwise? Board up that boxroom window! http://nearlylegal.co.uk/2011/10/forward-to-the-18th-century/