Warning over housing benefit cuts
08 September 2010Nearly one million people could be left destitute if the Government goes ahead with planned cuts to housing benefit, a trade body has warned.
The British Property Federation said cuts to the local housing allowance (LHA) could be a "recipe for destitution" for up to 800,000 people, who may be forced to move away from employment hotspots because they could no longer afford their rent.
The Government has proposed capping the LHA at 30% of average local rents, with future increases linked to the Consumer Price Index, rather than the Retail Price Index, which tends to be higher.
But the BPF said with half of LHA claimants living in areas of high housing demand, many may not be able to continue to afford local rents in the UK's most popular towns and cities.
It said in some areas of the country, including Harrogate, Trafford, Brighton and most of the South West, there were five to 10 workers looking to rent a two-bedroom home, for every LHA claimant searching for one.
The group warned that in these situations, LHA claimants were likely to "get left behind", as landlords tried to get higher rents from people who they thought were less likely to get into arrears.
It estimates that more than 400,000 new claimants will be hit by the changes, while a further 400,000 existing claimants who are working may be priced out of their homes and forced to leave their jobs and move to a cheaper area.
