Housing Crises. RLA leads Attack on housing cap certain to increase homelessness

WELFARE REFORMS LIKELY TO INCREASE HOMELESSNESS DESPITE REAL TERMS DROP IN RENTS

 

One of the country’s leading landlord’s organisations is today warning MPs that Government plans to cap benefits are likely lead to increased homelessness.

 

MPs will later today vote on whether to approve legislation that would mean benefit increases would be capped at 1% rather than going up in line with inflation. The Residential Landlords Association has argued that such a cap would be unsustainable, leading to many tenants finding themselves unable to pay their rents and thereby facing eviction, even though landlords have seen a real terms cut in rental levels.

 

Based on figures from the Government’s Valuation Office Agency, the average rent in England for the 12 months to September 2012 was 1.29% higher than in the preceding 12 months, below the 2.2% Consumer Price Index increase over the same period. Even with rents increasing by just 1.29%, those on benefits facing a 1% cap on the rise in their benefits will face added difficulties in affording their rent.

 

Commenting, Alan Ward, Chairman of the Residential Landlords Association said:

 

“Almost a quarter of tenants in the private rented sector are in receipt of housing benefits, including some that are in work. Whilst landlords have kept rent increases well below inflation this still wouldn’t be sufficient for benefit claimants facing a 1% cap on the increase in their benefits.

 

“Already before this measure is introduced, Shelter has reported that 1.4 million people are falling behind with payments on their rents or mortgages. The Government’s reforms will serve only to increase the number of families struggling to cope.

 

“With homeless charity Crisis also pointing to young, single people on benefits being able to access just 1.5% of rental properties available, it is clear that the housing benefit changes are having a severe impact on those in desperate need of housing.”

 

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Notes:

  

·         The RLA represents over 16,000 private sector residential landlords in England and Wales.

  

·         Data from the Valuation Office Agency, available at http://www.voa.gov.uk/corporate/statisticalReleases/PrivateRentalMarketStatistics.html show that in the 12 months to September 2011, average rents in England stood at £696 whilst the 12 months to September 2012 average rents were £705, this represents an increase of 1.29%. Inflation, as measured by the Consumer Price Index as of September 2012 stood at 2.2%.

 

·         Research by YouGov for Shelter has shown that 1.4 million people in Britain are falling behind with their rent or mortgage payments (http://england.shelter.org.uk/news/january_2013/1.4_million_britons_falling_behind_with_the_rent_or_mortgage).

  

·         In January 2012, Government reforms meant the age limit at which those on housing benefits are eligible only for a room in a shared house increase from 25 to 35. Research by Crisis however has shown that just 1.5% properties had landlords who were willing to rent to such claimants (http://www.crisis.org.uk/pressreleases.php/525/desperate-shortage-of-homes-for-single-people-says-crisis-as-charity-opens-its-doors-for-christmas).

  

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