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Housing benefit cuts will hit 90 per cent of capital’s rented homes
Paul Waugh, Deputy Political Editor3 Aug 2010
More than nine out of 10 rented homes in central London will be affected by the Government's housing benefit cuts, figures reveal today.
Research by the Department for Work and Pensions has found that slashing the benefit will also dramatically reduce the number of flats and houses available to the poorest across the capital.
Chancellor George Osborne wants to save £1.3 billion in welfare costs by reducing the rent levels at which housing benefit could be claimed.
But although the move is targeted at cases where claimants have been living in expensive homes in Mayfair, critics have claimed that it risks penalising tens of thousands of London's poorest residents.
The reforms cap benefits for four-bedroom houses at £400 a week, three-beds at £340 and two-beds at £290. The new study, buried on the DWP website, shows that just seven per cent of homes in central London have rents low enough to qualify for the new level of housing benefit.
In inner north-west London, 25 per cent of homes would be eligible for rent help. Across the capital as a whole, an average of just over 70 per cent of private rented homes would be deemed ineligible.
The figures also show that the cuts will bite even outside London, with areas from Exeter to Lincolnshire lacking the cheap rents needed to meet the new lower rates.
Shadow work and pensions secretary Yvette Cooper said the figures exposed the fact that rent levels were so high in London that people would simply have nowhere to go if they were forced out by the cuts.
Karen Buck, whose Westminster North constituency is hardest hit by the changes, said that pensioners and the “working poor” — those who have low wages but get help with their housing costs — are likely to be removed from communities they have occupied for years.
“Central London has by far the largest supply of private rented homes in the capital yet is hardest hit by new rules which could well drive thousands of families and pensioners from their homes,” she said.
Ms Buck, who is joining with Lib-Dem MP Simon Hughes to fight the cuts, said: “Analysis of distribution of London's private rental market shows half of it is in just six boroughs.”
The boroughs are Camden, Westminster, Kensington and Chelsea, Wandsworth, Lambeth and Barnet.
The cheapest area for housing, Barking and Dagenham, has one per cent of the London rental market.
The department's figures also show that families with children will be hit hard. Its study, Impacts Of Housing Benefit Proposals, makes clear that the proportion of eligible three-bedroom homes will drop 56 per cent to 30 per cent.
However, defenders of the reforms insist that Labour failed to grasp the nettle of housing benefit for years. At present, landlords can get rich by hiking rents and claiming the state aid through their tenants.
Reader views (36)
All the council flats in London should be sold immediately to the private sector and the current tenants should be rehoused in Bognor Regis.
- Sean, London, 04/08/2010 19:54
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another term for labour, this country would have been the laughing stock of the world.
thanks david(FRANK)cameroun, for rescuing us from the jaws of the SHARKS.
gus
erith
- gus, erith, 04/08/2010 14:00
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I can only think that the people here calling for the cancellation of this policy are the people who do not, will not and have no intention of working. You have to be a complete lunatic to work and think it is fine for some illegal immigrant or workshy unemployed to get housed in a 2000 pounds a week house. The solution is simple. Whatever the average wage for your chosen line of work will determine the amount of rent you can receive. Why house somebody in a house they could not afford to pay the rent on when in work ? There is no incentive to get a job if not. If people want to live in a nice house in a nice area then get of your lazy backsides and work.
Anybody living in London and has 2 arms and 2 legs can work. FACT. It may not be the job of choice but you can work. I used to fly back to London on a Friday and be working by Mon Tues at the latest. I even offered several newspapers to do it to show the fallacy of the unemployment myth. Not one was interested.
- Duncan Walker, Ex Peckham now Thailand, 04/08/2010 06:37
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"Shadow work and pensions secretary Yvette Cooper said the figures exposed the fact that rent levels were so high in London that people would simply have nowhere to go if they were forced out by the cuts."
Really? There is no other, cheaper place for them to live, just London or "nowhere"?
- Rich, New York City, USA, 03/08/2010 19:33
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oh by the way, i rent my flat to a couple who work hard and pay the rent with money they earn doing a job.
- Lisa, London, 03/08/2010 17:58
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I don't understand why anyone should be housed at taxpayers' expense in an expensive part of London. Any right to be housed within a particular borough should be scrapped, and replaced by a definition of an acceptable travelling time, and the inclusion of essential commuting costs (for those in work) in the calculation of benefits.
Provided rented accomodation is available at or below the capped level in a reasonable number of London boroughs, then benefit recipients should be obliged to move. Many people not receiving benefits are forced to live where they can afford to, rather than where they choose!
- Nigel, London, 03/08/2010 17:57
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I can tell you a solution - people are responsible for themselves, the chilren they have and the life they lead. I am not responsible to hand over hard earned cash so they can live a better lifestyle than I do. In Australia, EVERYONE on benefits has to do charity work (unless disabled or eldery) its call Work for the Dole - why can we not bring this in here.
The streets need cleaning, the elderly need visiting, meals on wheels for the disabled, parks cleaned - the list could go on and on.
If you want me to pay your rent - do you mind doing something productive in return to stay in my communiity.
- Nat, London, 03/08/2010 17:55
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Due to the housing market i have decided not to sell my flat so have rented it when i moved in with my partner. Just so you know its near impossible to get landlords insurance or for the freeholder to get insurance if you rent your property to a person receiving housing benefit, so i find this very hard to believe.
- Lisa, London, 03/08/2010 17:54
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I wouldn't argue LAs are homing people in private rented accommodation but it is NOWHERE near 90% of the rental market. A huge amount is actually diverted to B&Bs, hostels, and hotels.
Private landlords are well able to gain their ridiculous rents withouth having to deal with the formalities of being registered 'Social Housing' landlords or having their income known about by councils. Maybe in boroughs out of Central London, and absolutely for sure in the wider UK, but certainly not those in the centre.
Regardless, they are still picking up the vast pressure of housing the homeless and at present, there is no alternative. Every single person who has commented wants this to stop, including me, and yet no-one can name the alternative solution realistically.
- Real, Camden, 03/08/2010 17:49
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I am in 100% complete agreement - if 90% of rented houses are paid for by benefits - can we please do something today and not wait to April. I am sick to death of paying income tax AND council tax to pay for someone else’s rent ! and all the rest including cigarettes, booze and take-aways.
This will bring down rents to be affordable
Even AFTER the decease - it will still be higher than what my partner and i pay in rent - and we live in a small apartment and work incredibly hard
- Nat, London, 03/08/2010 17:42
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Real, Camden
You need a reality check. Fact, my local authority is housing large numbers of 'dependents' in expensive private housing. They spend many thousands of pounds a week doing so with the side effect of lining the pockets of private landlords.
This is a long overdue move to address the shocking abuses of the system that have happened under Labour. These abuses have left us no longer able to fulfil the needs of the many genuinely needy we have in London because the system is overloaded with workshy and freeloaders.
- Dave, London, 03/08/2010 17:22
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@ Anglo (not from London)
What a crap argument you make.
- Real, Camden, 03/08/2010 17:14
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The SOLUTION - realistically - is to do exactly what happened to me. Provide people with affordable secure tenancies. I was lucky to get housed in a council flat. This means my rent is now in total £225 per week cheaper than when I lived in private rented. It also means that when I work, I'm not left out of pocket. Had I remained in the private rented sector, I would have been working all day every day to pay a rent and bills that would have left me WORSE off than on benefits - I would have had to clear £400 p/w just to get my bills paid.
That is why social housing works. Ultimately, nobody has the incentive to work all day every day to pay a stupid rent to profit a greedy landlord for a crap flat in a crap area. Living substandard and costly with no hope of a mortgate and no hope of earning and saving your way out of it isn't just the reality of lazy 'dole scum' - it's the reality of an entire generation.
- Real, Camden, 03/08/2010 17:06
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To Real of Camden.
What a load of whinging rubbish you write.
- Anglo, Sussex England, 03/08/2010 16:55
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I'm shocked at the lack of care and concern for our country's social welfare here. I named the reasons why rents are high in London below - FACTS - and those reasons apply to everyone, not just people on benefits.
The majority of private rentals AREN'T to people on benefits. Local Authorities have a hell of a time trying to negotiate with landlords to let rooms or flats to people on benefits - for example in my borough, at the time I was homeless there were NO landlords or agencies prepared to do so. Most rentals are to working people and students who are forced to live over crowded or in shoddy accommodation. Where private landlords DO agree to take benefits, they relieve the burden of the LA who would otherwise have to pay for B&Bs or hotels (which are far more costly). And for the benefit of people wondering, YES, they absolutely do have to pay for hotels if nec.
The ONLY working class people who can afford to work in London are those in social housing tenancies - the rest subsist and struggle.
Let's not forget the Tories created this situation when they SOLD OFF social homes for profit that wasn't re-invested into housing. Then Labour did the same. Some of those homes were beautiful houses which now comprise the 'over £1m mark' in gentrified areas.
The Tories sold out the working classes and now they seek to punish the vulnerable and working class for a situation THEY CREATED.
How would you feel if you were suddenly unable to work and have kids to support? 
- Real, Camden, 03/08/2010 16:14
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The Labour government moved the Welfare class up the income ladder well above the genuine working classes that struggle to get by but have the honesty and social morals to support themselves.
Its about time the balance was very severely re-dressed in favour of those working classes. If that means some benefit breeders have to downgrade their free accomodation then tough until such time as working pays a whole lot more than social welfare again.
- Dave, London, 03/08/2010 15:23
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Solution.All non working people who sit on their backsides doing nothing should be sent to Scotland where housing is cheap.It can be Scotlands way of paying back the rest of the UK for all the benifits that received from Scotty Brown while he had power.
- dave, london, 03/08/2010 15:14
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Best thing that could happen to these people, I would just hire them a tent to sleep in or govenment buildings, non of this £2000 a week for people who have never (and will never)pay anything to this country. All pass sell by date food not to be thrown away, share out that, same as anything that is not moving food wise. Only coupons as well. Anyone who smoke or drinks and banned as well. Too Harsh!!! how many of you agree???????????
- Kat, Pounced out London, 03/08/2010 14:20
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If 90 per cent of the capital's rented homes are on benefits, then it strongly suggests that there is a very clear case for overhauling our overburdened and creaking welfare system.
- Frank, Home Counties, England., 03/08/2010 14:12
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Jon, London, your comments make me laugh, I can't believe someone lives this long in London and can go around with his head up his backside like you. My parents were working class (what you call working poor) they lived in a council house and worked very hard never claiming benefits. Unfortunately my parents never got a good education as they were born into a poor family so had to leave school at 15 to earn money. Fortunately I got a better education, am in a good job and own my own house so does that make me a brighter person then my parents, no just someone who had the opportunities they didn't. Ignorance is bliss!!
- Claire, London, 03/08/2010 13:51
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Also nothing happens until next april which is enough time for the liberal democrats to chastise themselves, the media to guilt ridden all and assundry, and for the tories to lose thier back bone. I doubt anything will change.
- Paul, London, 03/08/2010 13:40
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I agree that it is about time. This racket has been going on far too long, with champagne socialists voting for Labour's bottomless pit of debt and enormous taxation of normal hardworking people, to pay for 3rd or 4th properties bought on 100 percent mortgages by greedy low-life to house the feckless and idle at huge cost, while the taxpayer and average London resident's life gets worse, the idle jobless live comfortably and the champagne socialist property "investor" benefits. Disgusting and i am glad it is getting reviewed.
I am all for enterprise and business opportunity, but not when the tax payer is paying off several mortgages per person to house the economically inactive.
I hope the gravy train stops and the people who bought all these apartments on 100% mortgages to get in on this legalised scam get their properties repossessed.
- Andrew, Tel Aviv, Israel, 03/08/2010 13:25
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As has been said before. If you don't have a job that pays a lot of money, work harder or don't spend so much (ie stop having kids). Let's face it the so called "working poor" are not typically the brightest people and so on a genetic basis, it is unlikely that their children will be either. Evolution is a wonderful thing, unfortunately governments encourage a skewed outcome.
- jon, london, 03/08/2010 13:10
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@ Tony the Trader
I fully appreciate that you aren't a socialist but rent prices don't just affect the unemployed, they affect working Londoners too. If everyone took your advice, how do you expect that vital services and businesses would run?
- Real, Camden, 03/08/2010 12:57
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Greedy buy to let landlords who hike their rents to benefits tenants should be forced to sell if they can't find tenants on the open rental market. They get rich by overcharging benefits claimants for their properties and it's the working public who pay their rents. If governments took over the properties and ran them as council or housing trust homes, it would be a lot cheaper in the long run.
It would make sense to disperse around the British isles, those arriving in the UK if they are immediately looking to be housed by local councils. If the dispossessed and poor are arriving in large numbers and remain in the capital, how can we hope to find work for them in such an over-crowded market? More importantly, how can their children find work in the over-glut of high unemployment in the London area? With so many non working households in London, we are already seeing crime accelerate to unimaginable proportions.
- Peter, London, UK, 03/08/2010 12:57
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Greedy buy to let landlords who hike their rents to benefits tenants should be forced to sell if they can't find tenants on the open rental market. They get rich by overcharging benefits claimants for their properties and it's the working public who pay their rents. If governments took over the properties and ran them as council or housing trust homes, it would be a lot cheaper in the long run.
It would make sense to disperse around the British isles, those arriving in the UK if they are immediately looking to be housed by local councils. If the dispossessed and poor are arriving in large numbers and remain in the capital, how can we hope to find work for them in such an over-crowded market? More importantly, how can their children find work in the over-glut of high unemployment in the London area? With so many non working households in London, we are already seeing crime accelerate to unimaginable proportions.
- Peter, London, UK, 03/08/2010 12:57
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In this story, 6 paragraphs details arguments against the cuts. 1 paragraph detailing an argument for them. A well balanced article Mr Paul Waugh.
- Paul, London, 03/08/2010 12:57
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Mike
So rents will come down.
The reason rents are so high is because under the Labour gubberment, there was a bottomless pit to pay for luxury accomodation for lazy Labour voters with no jobs.
About time.
- Tony the Trader, Limehouse, London, 03/08/2010 12:46
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About time too
- Anglo, Sussex England, 03/08/2010 12:45
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Greedy landlords are profiteering from rents they know are paid through benefits by the DWP. They are milking the taxpayer to line their own bulging pockets. Very few ordinary people could afford those rents on their own.
All property that is rented should have their rents regulated by a "fair rent" certificate authorised by a local council.
- Janet, London, UK, 03/08/2010 12:43
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The notion of 'capping' of housing benefit rates is fundamentally flawed and cannot possibly be implemented in London. I sit back awaiting the scrapping of this ridiculous proposal.
The huge rise in rental prices and shortfall of affordable housing is due to the following key factors:
- The provision of 'buy to let mortgates'(in the late 80s by the Tories);
- The scrapping of Assured Tenancies (in the late 90s by the Labour Government);
- The sell off of social housing (Tories & Labour);
- Little or no land on which to build social housing;
Those four factors escalated house prices, diminished affordable housing stock, facilitated ridiculous rents FOR ALL LONDONERS, and let property owners run riot.
Add to this equation an economic crisis, job insecurity, high unemployment, massive immigration, mortgage providers clamping down too late, greedy Estate Agents & Managing Agents, and the fact EVERYONE (working or otherwise) needs a home ... Landlords can charge whatever they like. So they do.
People who have the misfortune to rent in London will know that the lack of affordable rented accommodation doesn't apply to just the unemployed. It's across the board.
So, C Government decide to blame this catastrophic culmination of events on Housing Ben rates? They decide to take out the consequences of this horrific situation on the poorest, most vulnerable people AND THEIR CHILDREN? And they lash this whip without offering a solution? SHAME ON THEM, SHAME, SHAME, SHAME
- Real, Camden, 03/08/2010 12:42
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'..Research by the Department for Work and Pensions has found that slashing the benefit will also dramatically reduce the number of flats and houses available to the poorest across the capital..'.
Cutting Housing Benefit will not dramatically cut the number of flats and houses available to the rental market. Rental costs in these areas are directly linked to the amount of Housing Benefit payable across each individual London Borough. A reduction in the benefit will simply be mirrored in rental values, as those who have BTL properties rely on the rental income to cover their own costs. Even those who exclusivly rent properties to private sector tenants will see a reduction in their rental income as such a move would find some BTL landlords attempting to boost their rental income by excluding DSS tenants. This in turn will lead to more properties becoming available to the private tenant and so putting them in a better position to negotiate a competetive leasehold.
- paul, Brixton SW, 03/08/2010 12:33
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Then rental prices will fall. If it means that those whose invested in property, and priced me out of the market, have to reduce their portfolio then so be it.
- Gary, London, 03/08/2010 12:30
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It is of course clear that something had to be done because there were a number of cases where the payment being made for the property was ludicrous but it appears that far more effort in the planning of it's implementation was required because it appears an awful lot of people who may have real problems paying a realistic rent.
- Mike Melbourne, Bedford, 03/08/2010 12:26
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Goes to show then that it's the tax payers who are funding the pension pots of the buy to let landlords. The sooner this is curtailed the better. If the new rents don't cover the mortgage then sell up - This will bring in the much expected correction.
- Sugar,, Lon UK, 03/08/2010 12:25
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Why should anyone get their rent paid by the rest of us?
If you can't afford where you're living, MOVE SOMEWHERE CHEAPER or WORK HARDER.
- Tony the Trader, Limehouse, London, 03/08/2010 12:24
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