Housing

The housing benefit rise will only make 900 more properties more affordable

The Bureau of Investigative Journalism’s research found that £10 extra per month will help virtually no one

London, England, United Kingdom - February 11, 2015: FOR SALE and TO LET real estate agent signs outside residential housing development in Hackney. Many house rental and sales agency signs in a row. Multiple sign boards.

The housing benefit rate increase will only increase the number of affordable homes by a fraction, claims a Bureau of Investigative Journalism study, helping virtually no one.

The Government announced that the Local Housing Allowance rate, which has been frozen since 2016, would increase in line with the Consumer Price Index, giving claimants an extra £10 a month.

But the Bureau found that just 900 more properties were affordable under the increased rate, compared to the current one, after they applied it to more than 62,000 two-bed rental adverts in Great Britain from last September.

Overall, only seven per cent of the properties advertised at that time would have been affordable if the LHA increase had been applied then, up from 5.6 per cent under the current rate.

But both fall far below what LHA was intended to provide for claimants. The benefit was intended to ensure the bottom 30 per cent of the market was affordable for people on benefits. Even the end of the freeze, which was intended to save £1.3bn in cash terms in 2016/17, does not improve matters.

In Bristol, only four out of 450 properties advertised on the day were affordable, a rise of one property. In Cardiff the increase was from similarly indistinguishable, from two homes to three. Only seven more were available in Central London, out of 4,000 properties.

The 30 per cent target was only met in a few areas in central Scotland and Lancashire with, on average, an LHA increase of £87 a month needed to hit that threshold elsewhere. In Central London that increases to an extra £1,398 per month.

“As this research shows, the government’s recent decision to raise housing benefit in line with inflation, following years of cuts, is a drop in the ocean to the investment that we know families need,” said Jon Sparkes, chief executive of Crisis.

“We see time and again in our services how inadequate levels of housing benefit are forcing people to make huge sacrifices on basic necessities so they can cover their rent or face eviction.”

In reaction to the LHA rise, Sparkes’ counterpart at housing charity Shelter, Polly Neate, penned an exclusive opinion piece explaining how the LHA rise will do “almost nothing” for people trapped in expensive private rented properties. The charity’s research with YouGov recently found that 57 per cent of private renters claiming housing benefit had experienced stress and anxiety about affording the rent, poor housing conditions and the threat of eviction.

Responding to the Bureau’s investigation, a government spokesman said: “Providing quality and fair social housing is a priority, which is why we’ve increased the LHA rates and from April around 900,000 people across the UK could see their housing benefit rise. We spend around £23bn a year helping people across the UK with their housing costs and we’re increasing support for low-income households in areas where LHA rates have diverged furthest from local rents.”

With thanks to The Bureau of Investigative Journalism’s Charles Boutaud and Maeve McClenaghan

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