23 July 2010
Housing groups are warning today that benefit reforms brought in under last month’s Budget threaten to make three quarters of a million people homeless.
The figure – which only covers London and the Southeast, where housing is most expensive – has been published today by the National Housing Federation.
Caps introduced by Chancellor George Osborne specified upper limits for benefit payments depending on property size, up to £400 a week for any home.
In addition, anyone claiming Jobseekers’ Allowance for more than a year is faced with a 10% cut in housing benefit.
The NHF estimates that 425,000 Londoners claiming Housing Benefit for private rented properties will be put at risk of losing their homes. A further 326,250 are expected to be forced to move in counties around the capital.
Some local authority areas, such as Camden, Islington and Southwark – which still retain large amounts of social rented housing – could become no-go areas for private tenants wishing to claim housing benefit.
NHF chief executive David Orr said the UK could be on course for greater social division and its highest homeless figure since records began in 1980.
‘The housing benefit caps could see poorer people effectively forced out of wealthier areas, and ghettoised into poorer neighbourhoods,’ he said.
‘Unless ministers urgently reconsider these punitive housing benefit cuts, we may see more people sleeping rough than at any stage during the last 30 years.’
A spike in homelessness would increase the strain on councils, as local authorities could be obliged to house tenants evicted due to their inability to pay rent. Typically these cases are housed in bed and breakfast accommodation – at even greater expense to the taxpayer.
Shelter backed the findings, warning that ‘vulnerable people up and down the country, including pensioners, those with disabilities and people on low incomes, will be pushed over the edge into a spiral of debt, eviction and homelessness.’
But welfare reform minister Lord Freud said the government’s focus was on reforming the system ‘so that we are no longer left in the absurd situation where if you are on benefits you can receive an expensive house in a smart area that many working families could not afford.’
The NHF has called on the government to set up a ‘poverty commission’ to monitor the impact of its policies.
An impact assessment of the Budget is currently being prepared by the Treasury. However no date has yet been set for its release.
See Shelter's article on housing benefit cuts
