Tenants cutting essentials before finding work as housing benefit cuts bite

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Tenants in the private rented sector hit by caps to the Local Housing Allowance (LHA) would rather cut back on essentials before finding work, an independent study commissioned by the Government has revealed.

The views were recorded in an analysis of the early impact of housing benefit reforms on both landlords and tenants.

The survey of claimants  - which included 1,910 face-to-face interviews - were undertaken in autumn 2011, several months after the measures had been introduced for new claimants (from 1 April 2011), but before they affected existing claimants.

Respondents were asked what they would do to make up the (increased) shortfall if their housing benefit was to be reduced.

The most common likely responses were cutting back on spending on essential (45 per cent) and non-essential (37 per cent) budget items. A quarter of claimants said they would borrow money from family and friends; and one in ten thought that they would take out a loan or borrow from a credit card.

The research found that a future cut in their housing benefit might encourage some claimants to take employment-related actions to make up the (increased) shortfall. For example, a third said they would look for work and one in six that they might look for a better paid job.

The hypothetical responses were broadly similar to the actions that claimants with a shortfall reported that they had taken over the past year to make up the difference.

The study did reveal, however, that London claimants were more likely to have taken employment-related actions than those living elsewhere in Britain.

From next April, social tenants face cuts to their housing benefit if they have spare rooms and will be affected by a £500 a week household benefit cap.

Many social landlords have been working on individual schemes to cut worklessness and upskill tenants in a bid to help them cover shortfalls in their housing benefit.

In May another report revealed that only 42% of housing providers know the employment status of their tenants or residents.