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Reform driving poorer families out of London's PRS

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Reform driving poorer families out of London's PRS

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Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Regulation

Quarter of children in London 'come from jobless homes' Quarter of children in London 'come from jobless homes'

The Tory-led coalition's reforms of the Welfare system are driving poorer families out of the private rented sector in parts of London, according to new analysis from the Chartered Institute of Housing.

In the borough of Kensington & Chelsea, the number of people claiming housing benefit in the PRS has fallen by more than a quarter since March 2011 and in Westminster by nearly a third.

In contrast, claims are increasing across London and Great Britain as a whole as rising prices in the PRS mean more people are having to claim housing benefit – including more people in work.

Changes to local housing allowances (the housing benefit paid to most tenants who rent from private landlords) came into force for new claimants in April 2011 and have applied to all existing claimants for more than a year.

The reforms set LHA rates at a lower level, reduced the rates for single people aged 25-34, and imposed a maximum cap on LHA rates which ranges from £250 for a one-bed home to £400 for a four-bed home per week.

CIH chief executive Grainia Long said: “The combined impact of high rents and local housing allowance reform means that poorer families are effectively being priced out of the private rented sector in some areas of London.

"My biggest concern is where they are ending up – social housing is at a premium across the capital.

"To find a more affordable home people may be forced to move long distances away from where they work – which could make it difficult to hold down their job in the long term – and from their support network of family and friends.

“It cannot be right that some areas of the capital are becoming the exclusive preserve of the wealthy elite or that people on lower incomes are simply unable to afford to live in the places where they work. Increasing the number of new homes we build is vital if we are to have any hope of sustaining mixed communities.”

The latest figures from the Department for Work and Pensions show that the number of people claiming housing benefit in the PRS has dropped by 31.3% in Westminster, from 8,580 in March 2011 to 5,893 last November.

In Kensington and Chelsea, the number has dropped by 27.6%, from 4,180 to 3,027.

Across London the number of people claiming housing benefit in the PRS has risen by 3.9% over the same period and by 6.4% across Great Britain.

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