The Housing Disaster set for January 2012
Housing benefit is set to be cut and capped in January 2012. The original plans were delayed by nine months to allow councils to prepare for an exodus of tenants from affluent, to less affluent areas. How likely is it really that Landlords will reduce their rents to meet the new LHA (Local Housing Allowance) caps? This is what the coalition government think will happen, and are in fact depending on.
The much more likely scenario, in this strange thing we know as The Real World, is that landlords still have mortgages to pay on their buy to let properties, and will not be financially able to implement such a thing, even if they wanted to. Those few landlords who would be in a position to reduce rents, won't because the market rate will not see a general drop. Landlords who so readily put up their rents to meet the LHA rates, will never be just as ready to cut them.
So where does that leave the tenants - of whom a staggering 388,000 (August 2011 government figures) in London alone are the working poor, settled in their homes and having lived in those areas for years, with jobs there and their children at local schools. There are some relative newcomers to these areas, but they are only there due to a lack of affordable, local authority or housing association homes, and/or migration for a job. There are many reasons why a person may have chosen or been forced to rent in an expensive area; some of these people would have started renting their homes in better times, when they had a well paying job, and have since been made redundant and had to claim housing benefit. Some will have been there a long time, but become entitled to housing benefit over the years as their rent increased. Some will have lived there for years due to family connections, and some will have had little choice due to other circumstances.
I, for example am one of those types - when I left my abusive marriage, the only choice available to me was to rent privately, in a home far more expensive than one with a housing association - there simply wasn't enough social, affordble housing to give me any choice in the matter. The only way I could leave and be put into emergency (B&B) accomodation was to get my ex to agree to officially evict me - he refused, because he refused to believe the relationship was over, and put every obstacle possible in my way. I was offered a place at a refuge, but it was over 20 miles away and to go there would have meant leaving my job and uprooting my child, who had already had a difficult year. So, no choice for me - it had to be private rental.
Thankfully, although the rent was more expensive than LA or HA housing, I was able to meet it with the aid of housing benefit, keep my job, keep my child settled with her long established friendships and keep the support of friends in the area. I fear for other people who are faced with a similar choice - if they happen to be settled in an affluent area, they will face having to move potentially very far away from family, schools, jobs, support - just to find somewhere where the newly capped LHA will actually go some way to meeting the cost of market rents.
The capping won't affect me directly - my place, although reasonably expensive for the area, will still fall under the capped rate, and I won't therefore find it impossible to meet the new shortfall between benefit and rent, so won't have to move out of the area. It's how easily this could have been me, or anyone - that strikes a chord.
So, the answer to the question of "where does this leave the tenants?" is this:
They will need to find the shortfall or increased shortfall between the capped LHA and their rent themselves. In times already so squeezed, this will be impossible for many.
So the next option is to move away, potentially making a commute to their jobs impossible to afford.
The option of moving away presents many other problems. If a tenant is lucky enough to be offered social housing, they will still have the cost of removals and making the home suitable to be lived in - social housing properties are let unfurnished and not carpeted and often in a poor state of decoration.
Local authorities and housing associations do not have enough properties for everyone this will affect, so many will need to find a private rental, and so will need to stump up the cash in advance for the deposit and first months rent, while awaiting their deposit back from their previous landlord, and awaiting the rent in advance or a portion of it back from their new LHA claim - something that could take up to six weeks to be granted, meaning on top of that they may also have to find another months rent themselves in the meantime.
They may also need to pass a credit check or find a guarantor to be allowed to privately rent a property - these hurdles combined will mean for some that moving just isn't possible and they will have to sit it out and wait to be evicted and housed in emergency accomodation - again most likely very far away from their jobs, childcare, and support networks.
For some of these people, (the single working and unemployed poor) - sadly the local authority will not have a duty to house them and they could face homelessness. Some will be classed as having made themselves intentionally homeless, and those forced to leave jobs to claim benefits may have their claims refused, as it will appear they have simply walked out of a job.
Some of these people will be elderly, disabled or otherwise vulnerable, unaware of their rights and unable to seek help.
This situation awaits them in just under a months time - a ticking time bomb of personal disaster for many, and collective shame for the coalition.
These measures will save just 50 million pounds. It may sound a lot, but in the grand scheme of things where the UK budget deficit is one TRILLION pounds, and tax evasion costs the UK 15.2 BILLION in lost revenue, and 11 Billion may be spent on the HS2 Birmingham to London high speed rail line, the human cost of this measure is appalling and unjustifiable.
Housing benefit is set to be cut and capped in January 2012. The original plans were delayed by nine months to allow councils to prepare for an exodus of tenants from affluent, to less affluent areas. How likely is it really that Landlords will reduce their rents to meet the new LHA (Local Housing Allowance) caps? This is what the coalition government think will happen, and are in fact depending on.
The much more likely scenario, in this strange thing we know as The Real World, is that landlords still have mortgages to pay on their buy to let properties, and will not be financially able to implement such a thing, even if they wanted to. Those few landlords who would be in a position to reduce rents, won't because the market rate will not see a general drop. Landlords who so readily put up their rents to meet the LHA rates, will never be just as ready to cut them.
So where does that leave the tenants - of whom a staggering 388,000 (August 2011 government figures) in London alone are the working poor, settled in their homes and having lived in those areas for years, with jobs there and their children at local schools. There are some relative newcomers to these areas, but they are only there due to a lack of affordable, local authority or housing association homes, and/or migration for a job. There are many reasons why a person may have chosen or been forced to rent in an expensive area; some of these people would have started renting their homes in better times, when they had a well paying job, and have since been made redundant and had to claim housing benefit. Some will have been there a long time, but become entitled to housing benefit over the years as their rent increased. Some will have lived there for years due to family connections, and some will have had little choice due to other circumstances.
I, for example am one of those types - when I left my abusive marriage, the only choice available to me was to rent privately, in a home far more expensive than one with a housing association - there simply wasn't enough social, affordble housing to give me any choice in the matter. The only way I could leave and be put into emergency (B&B) accomodation was to get my ex to agree to officially evict me - he refused, because he refused to believe the relationship was over, and put every obstacle possible in my way. I was offered a place at a refuge, but it was over 20 miles away and to go there would have meant leaving my job and uprooting my child, who had already had a difficult year. So, no choice for me - it had to be private rental.
Thankfully, although the rent was more expensive than LA or HA housing, I was able to meet it with the aid of housing benefit, keep my job, keep my child settled with her long established friendships and keep the support of friends in the area. I fear for other people who are faced with a similar choice - if they happen to be settled in an affluent area, they will face having to move potentially very far away from family, schools, jobs, support - just to find somewhere where the newly capped LHA will actually go some way to meeting the cost of market rents.
The capping won't affect me directly - my place, although reasonably expensive for the area, will still fall under the capped rate, and I won't therefore find it impossible to meet the new shortfall between benefit and rent, so won't have to move out of the area. It's how easily this could have been me, or anyone - that strikes a chord.
So, the answer to the question of "where does this leave the tenants?" is this:
They will need to find the shortfall or increased shortfall between the capped LHA and their rent themselves. In times already so squeezed, this will be impossible for many.
So the next option is to move away, potentially making a commute to their jobs impossible to afford.
The option of moving away presents many other problems. If a tenant is lucky enough to be offered social housing, they will still have the cost of removals and making the home suitable to be lived in - social housing properties are let unfurnished and not carpeted and often in a poor state of decoration.
Local authorities and housing associations do not have enough properties for everyone this will affect, so many will need to find a private rental, and so will need to stump up the cash in advance for the deposit and first months rent, while awaiting their deposit back from their previous landlord, and awaiting the rent in advance or a portion of it back from their new LHA claim - something that could take up to six weeks to be granted, meaning on top of that they may also have to find another months rent themselves in the meantime.
They may also need to pass a credit check or find a guarantor to be allowed to privately rent a property - these hurdles combined will mean for some that moving just isn't possible and they will have to sit it out and wait to be evicted and housed in emergency accomodation - again most likely very far away from their jobs, childcare, and support networks.
For some of these people, (the single working and unemployed poor) - sadly the local authority will not have a duty to house them and they could face homelessness. Some will be classed as having made themselves intentionally homeless, and those forced to leave jobs to claim benefits may have their claims refused, as it will appear they have simply walked out of a job.
Some of these people will be elderly, disabled or otherwise vulnerable, unaware of their rights and unable to seek help.
This situation awaits them in just under a months time - a ticking time bomb of personal disaster for many, and collective shame for the coalition.
These measures will save just 50 million pounds. It may sound a lot, but in the grand scheme of things where the UK budget deficit is one TRILLION pounds, and tax evasion costs the UK 15.2 BILLION in lost revenue, and 11 Billion may be spent on the HS2 Birmingham to London high speed rail line, the human cost of this measure is appalling and unjustifiable.
I read the blog about LHA caps and wanted to point out that if you have had to move before it is due to come in (as I have) the reduction begins immediately.
ReplyDeleteMy HB has gone down by £50 a month, that is at the same time that my childcare element of Tax Credits has gone down.
Also, I don't think that landlords ever raised rents to meet the LHA's. It was more a case of property prices going sky high.
Most HB claimants are in work, and because of the massive rents anyone earning under around 18 k a year needs a HB top up.
So obvs, the reduction hits us single parents hardest, as we only have one income.
In London it is actually a bit better for private tenants, as the LHA is more realistic, but where I live in Yorkshire, there is less rented accommodation, and with the new LHA rates you can really only afford to live somewhere pretty rough.
What this means is that all the poor people end up sending their kids to the same schools,in rough areas, and the schools in posher areas are exclusively white, middle class and wealthy, so there is no social mix at all.
Posted via mumsnet by Nativitywrecks
Even if you move to another, cheaper area, LHA is likely to be lower in that area anyway so there will still be a shortfall.
ReplyDeleteMy landlord is extremely reasonable and in fact consulted me some months ago to warn me that he would need to put the rent up shortly and asked if this would create a problem for me financially. I would have managed, but that was before the cuts. As it happened my partner moved in and as Nativitywrecks found, this put us immediately on the new lower LHA limit.
@caffeine_lights
Loved rreading this thank you
ReplyDelete