Housing professionals have teamed up with private landlords to ask ministers to think again about Housing Benefit cuts.
A report from the Chartered Institute of Housing and the British Property Federation, published today, disputes the government’s claims that private sector landlords set their rents at the maximum tenants can claim under the Local Housing Allowance.
Ministers say that cutting the allowance will force landlords to lower their rents, taking some of the heat out of the private rental market.
But the CIH and BPF say that increases in the Housing Benefit bill is due to a change in the make-up of claimants rather than private landlords profiteering. More recession-hit families living in expensive London and the Southeast have started to claim the benefit, the bodies say.
The report, Leading the market? A research report into whether LHA lettings are feeding rent inflation, includes an analysis of amounts payable for LHA for the 18 months following its introduction in April 2008. This shows that rates fell in 61% of areas as private landlords reduced their rents.
CIH interim chief executive Grania Long said: ‘We have shown that the LHA does not push up rents and so it cannot be used to bring them down again. These cuts are going to cause a great deal of hardship to a large number of households without either the taxpayer or householders reaping the benefit.’
She added that while it was ‘imperative’ that the government addressed high rents in the private rented sector, cutting the LHA was not the way to do it.
Ian Fletcher, director of policy at the British Property Federation, said the report showed that the LHA system reflected the overall rental market.
‘When Retail Prices Index inflation is factored into the equation, the majority of LHA cases will have in fact seen a fall in real terms,’ he said.
The government’s Welfare Reform Bill, which includes the proposals to cut LHA, is being debated in the House of Lords today.
