Considering the consequences

The CIH released a briefing note examining the potential impact of the Government’s changes to Housing Benefit and Local Housing Allowance (LHA). The document gives a detailed overview of what housing providers and local authorities with a strategic housing role may have to face in the coming months and years as the reforms bite.

“Whilst we accepted the need to control expenditure we do not support the proposals announced in the Emergency Budget as being the right approach because they will hit low income households hard during the recession precisely when they are most in need of support and when adverse consequences are likely to be most damaging,” the report said.

“We recognise the need to make savings across all departments but we believe that these particular budget proposals mean that low income households disproportionately shoulder the burden. Tens of thousands of households will be hit hard in the pocket or could be completely priced out of the communities where they are currently living and working. And all of this without consideration of the overall effects these changes will have when combined with the sharp reductions in expenditure for social housing programmes across the UK.”

Looking ahead, the organisation suggests that local authorities with a strategic housing role may see:
•Movement of low income tenants from more expensive rental market areas to cheaper ones
•Households struggling to access private rented accommodation
•Increased hardship, shown by greater demand for debt and counselling services, and rising arrears
•Concentration of tenants in receipt of LHA in cheaper, poorer quality private rented housing
•Greater demand on homelessness and housing options services
•Potential impact on temporary and/or bed and breakfast accommodation if tenants evicted are considered intentionally homeless
•Greater levels of overcrowding
•An increase in the numbers of people putting themselves forward for the waiting list
•Landlords becoming less willing to let to known benefit claimants
•Increased applications for discretionary housing payments
Meanwhile, social landlords may see:
•Increasing financial pressure on tenants, especially in areas where long-term unemployment is higher, such as in parts of Birmingham, London and Northern Ireland
•Higher levels of vacancies due to planned moves and abandonment
•Increased incidences of non-dependent deductions and over-crowding as households give up their own tenancy and move in with friends and family
•Increased requests for transfer as people seek cheaper properties
•Higher demand for social housing from tenants who are either living in, or intending to live, in private rented accommodation
•Increased demand for independent housing from people who previously shared
•Higher incidence of adult children falling out with their parents and being asked to leave the family home
•Tenants being less willing to care for their elderly parents in their own home
•Increased risk and incidence of slowly increasing arrears
•Need for additional staff and communications resources to collect shortfall from tenants
•Increased pressure from Housing Benefit departments on landlords to monitor their tenants with tenancy audits and notify of changes
•Housing associations’ income streams may become vulnerable, affecting their ability to borrow money cheaply – leading to less funding for development, financial exclusion schemes and employment schemes