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Impacts of Housing Benefit cuts on London. Rachael Orr, Shelter. Timeline and number of London households affected. Scrapping the £15 'excess' if claimant’s rent was below the median. Increasing deductions for non-dependants living with HB claimants.
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Impacts of Housing Benefit cuts on London Rachael Orr, Shelter
Timeline and number of London households affected Scrapping the £15 'excess' if claimant’s rent was below the median Increasing deductions for non-dependants living with HB claimants Ending of the 5-bedroom rate, LHA restricted to 4-bedroom rate Capping the maximum rates of LHA that can be paid for each size of property FOR NEW CLAIMANTS APRIL 2011 82,640 affected – 52% of claimants 17,410 affected – 11% of claimants Existing claimants will be hit by these reforms 9 months after the anniversary of their claims – so will start to be affected from January 2012 Setting the maximum LHA paid at the 30th percentile rather than the median SRR raised - paid to everyone under 25 to everyone under 35 APRIL 2012 113,300 affected – 71% of claimants 88,000 UK households affected Maximum rate of HB linked with Consumer Prices Index (CPI) Capping total benefits for non-working and some working households to £26,000 per year Limiting working age HB entitlement to reflect household size in the social rented sector Universal Credit introduced APRIL 2013 29,890 households affected, average loss £93 a week All claimants, around 190,000 affected
Impacts of the caps, 30th percentile change and CPI link • Poverty and homelessness • 23% of private tenants in London stand to lose over £20 per week in LHA • Up to 44,000 households in London will be pushed into serious financial difficulty. They will have three options - hope their landlord will lower the rent; move to a cheaper home; or become homeless. • The GLA estimates that households placed in TA across London could increase by 4,865 by March 2012 • London Councils estimate that 82,000 households across London will be at risk of losing their home as a result of the changes. • Overcrowding? • More than 1,600 households affected by removal of 5-bed rate • Migration • By 2016, if all proposed changes go ahead, only 36% of neighbourhoods in London will be largely affordable to LHA claimants • Less than 10% of City of London, Westminster, H&F, K&C, Islington will be largely affordable • 97% of Barking and Dagenham, 76% of Newham, 73% of Enfield will remain largely affordable
Impact of the proposed changes to LHA on the affordability of London neighbourhoods, 2010
Impact of the proposed changes to LHA on the affordability of London neighbourhoods, 2011
Impact of the proposed changes to LHA on the affordability of London neighbourhoods, 2016
Particular issues for single people • 2012 – Raising single room rent or shared room rent from 25 to 35 • This will effect all private sector claimants • The possible shortfalls in London range from £70 to £140 a week • This will force people under the age of 35 to share/sofa surf • Will there be enough properties for people to move into? • Uncertainty for landlords • Disincentive to those currently or considering letting to HB/LHA tenants - around 60 per cent of landlords currently renting to HB tenants in London would not reduce their rent by even a small amount if the tenant could no longer pay the full rent due to changes in LHA. • Possible reduction in the number of landlords willing to accept temporary accommodation contracts • Fewer landlords willing to accept benefit claimants • Social Sector • Increased demand as the PRS shrinks for those on benefit • Increased demand for temporary accommodation
