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The benefit freeze is keeping people out of London and making them homeless

Councillors said Westminster policy is 'fuelling skyrocketing homelessness' in the capital

Spiralling rent costs and stagnant housing benefit payments have made large areas of London completely inaccessible to people on housing benefits looking for a home.

New analysis by London Councils also suggested that the local housing allowance freeze is exacerbating the city’s homelessness crisis.

The research showed a huge reduction in the number of homes that are affordable for Londoners on housing benefits over the past four years. The local government association for the capital found that only between 0 and 15 per cent of private sector rents across London could be covered by local housing benefits.

In areas like outer South West London, there wasn’t a single property found to be affordable for single claimants looking for a room in a shared house.

Local housing allowance is paid as part of wider housing benefits or Universal Credit payments.

But the government introduced a four-year freeze on local housing allowance rates in April 2016, which London Councils says has “severely restricted” housing options for people in London who use the benefit to pay their rent.

The London Councils researchers also discovered that nearly half of the almost 200,000 low-income households claiming the benefit for private rent didn’t receive enough to cover their rent.

And a fifth of claimants in London are living in bedrooms with fewer bedrooms that they are entitled to (rising to a third of claimants in some areas) which would qualify the property as legally overcrowded.

Cllr Muhammed Butt, London Councils’ executive member for welfare, empowerment and inclusion, called the benefit freeze “counterproductive”, accusing it of “fuelling London’s skyrocketing rates of homelessness”.


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He continued: “Keeping local housing allowances frozen during a period of fast-rising rents has made private renting in the capital increasingly unaffordable. The resulting pressures on household finances are immense and a crucial factor in the increase in homelessness, with the number of homeless households in London 50 per cent higher at the end of 2017/18 compared to 2010/11.

“Bringing LHA back up so that claimants could afford at least 30 per cent of local housing in the private rented sector would significantly improve accommodation options for Londoners and would represent a big step forward in tackling homelessness in the capital.”

Some people have to cut back on essentials like food and fuel – or to take out loans – because of the average £50.71 per week shortfall.

Describing a “chronic shortage” of social housing in London, the local government association said many low-income individuals and families are forced to depend on the private rental sector for housing.

Greg Beales, campaign director at housing charity Shelter, said: “When housing benefit is so low that people are having to find over £50 a week to cover even the lowest rents, they face grim decisions between food, electric bills and keeping a roof over their head.

“The problem isn’t just confined to London, there is a gap between LHA and the bottom third of rents in 97% of areas across the country. The benefits freeze is pricing people out of anywhere to call home, and directly stoking the homelessness crisis.”

Beales joined London Councils in calling for the government to lift the benefit freeze and raise housing benefit to stop people being pushed into poverty and homelessness.


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The ending of an assured shorthold tenancy (most common with private landlords) is now the biggest cause of homelessness in London.

Local councils in London have had to organise temporary accommodation for 54,000 households (including 87,000 children), nearly 70 per cent of the total number in temporary housing in England.