What the proposed housing benefit limits will mean

By Robert Taylor

Private tenants in Fitzrovia who are receiving Local Housing Allowance (LHA) face some very stark choices indeed next year.

From April 2011 LHA rates for all housing benefit claimants will be capped as follows:

• £250 per week for a 1 bedroom property
• £290 per week for a 2 bedroom property
• £340 per week for a 3 bedroom property
• £400 per week for a 4 bedroom or larger property

To make matters worse, from October 2011 LHA rates will be based on the thirtieth percentile, which basically means only 30 percent of properties in a given area will be affordable to benefit claimants, rather than 50 percent as before.

Then from April 2013 LHA rates will only increase by the Consumer Price Index (CPI) rather than the higher Retail Price Index (RPI). Also, tenants who have been claiming Jobseekers Allowance (JSA) for more than a year will have their LHA cut by 10 percent, and if you are 35 years of age or under you will only be able to claim the rate for a shared room in a property. Which means that you will not be able to claim housing benefit and live on your own until you reach the arbitrary age of 36 !

In fact, these cuts are so controversial that not only have they been condemned by tenants groups like the Camden Federation of Private tenants and homeless charities like Shelter and Crisis – but landlord groups and London’s Mayor Boris Johnson – who provocatively described them as “Kosovo-style social cleansing”.

So, what will happen to private tenants living in central London who will not be able to afford their rent ?

The government expects the following to happen:
1. The tenant will negotiate a lower rent with the landlord
2. The tenant who works and claims LHA will make up the difference out of their own pocket
3. The tenant will move to a cheaper outer London borough or out of the city altogether

What is likely to happen:

1. According to a recent survey conducted by London Councils very few landlords will be willing to reduce the rent – especially if the claims of 5 tenants currently chasing every property in the private rented sector is true
2. Part-time or low-paid workers will be extremely unlikely to have any spare cash available to make up the difference
3. If large numbers of tenants do move to other boroughs or outside London it will increase the rents in these areas
And the ones that don’t get mentioned:
4. More people will become homeless thus putting a greater strain on already cash-strapped local councils and other services
5. The capital will become an even more divided city than it already is with the centre becoming a ghetto for the wealthy and the edges a ghetto for the poor

What should you do if you are a Camden private tenant in receipt of LHA and think it will not cover your rent next year ?
1. Don’t panic – and get in touch with somebody who can give you advice as soon as possible
2. We can be contacted on: 020 7383 0151, the council’s Private Sector Housing Advice Team on: 020 7794 5801 (they have a lot of experience of negotiating with landlords) or get in touch with a local group that gives housing advice such as the Fitzrovia Neighbourhood Association on: 020 7580 4576
Camden Federation of Private Tenants, 11-17 The Marr, Camden Street, NW1 0HE.
We can also be contacted by email on: admin@cfpt.org.uk

Robert Taylor is organiser of Camden Federation of Private tenants