Government reforms to the welfare system are failing in their aim to reduce rents and could even be driving price hikes, according to a report by London Councils.
Tracking Welfare Reform: The Impact of Housing Benefit Reform in London analyses the impact of changes to Local Housing Allowance (LHA), the main housing benefit. It finds that:
• the changes have not led to reduced rents. Some boroughs have seen rents rise by over 20 per cent over recent months – which pushes up rents for all tenants, not just those receiving housing support
• working households accounted for 90 per cent of the growth in housing benefit in outer London, where the rise in those claiming benefits is highest. This shows that low-income working families are disproportionately hit by the changes compared with other groups. This has wider effects on other public services: for example, exacerbating demand for school places
• more than two-thirds of the growth in housing benefit receipts are in the private rented sector – which, being more expensive, increases costs for the taxpayer and directs money to private landlords, rather than being reinvested in affordable social housing.
London Councils
Tracking Welfare Reform: The Impact of Housing Benefit Reform in London analyses the impact of changes to Local Housing Allowance (LHA), the main housing benefit. It finds that:
• the changes have not led to reduced rents. Some boroughs have seen rents rise by over 20 per cent over recent months – which pushes up rents for all tenants, not just those receiving housing support
• working households accounted for 90 per cent of the growth in housing benefit in outer London, where the rise in those claiming benefits is highest. This shows that low-income working families are disproportionately hit by the changes compared with other groups. This has wider effects on other public services: for example, exacerbating demand for school places
• more than two-thirds of the growth in housing benefit receipts are in the private rented sector – which, being more expensive, increases costs for the taxpayer and directs money to private landlords, rather than being reinvested in affordable social housing.
London Councils
