A Squeeze On Housing Benefit Is Driving More People Into Homelessness, Says New Report

Homelessness has more than doubled since 2010.
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Welfare cutbacks are to blame for the decade-long increase in homelessness from private rented housing, new research says.

Local Housing Allowance (LHA) rates, introduced in 2008 to calculate housing benefit for poor households, increasingly leave tenants short of the actual rent, according to a report by Manchester Metropolitan University.

Homelessness rates have more than doubled since 2010, when LHA was cut to cover the bottom 30% of the market and later frozen altogether.

According to the report, compiled with the Residential Landlords Association (RLA), the gap between housing benefit and actual rent is more than £100 per month in some cases.

The Government has said it is reviewing LHA.

Housing benefit tenants are the most likely group to end a tenancy and the research says, because of the shortfall, they are finding it difficult to find affordable accommodation in the private rental sector.

And while 90% of people choose to leave a rental agreement, around 10% see their tenancy ended by the landlord, adding up to some 271,000 over the last three years.

The report says half of cases where tenants are asked to leave or served with an eviction notice is due to rent arrears, anti-social behaviour or damage to the property.

“Most landlords ask their tenants to leave to protect their property. It would be a bizarre business model indeed to search for ways to get rid of your customers.”

- David Smith, policy director for the Residential Landlords Association

Other reasons include the landlord needing to take back possession of a property for sale or refurbishment.

Researchers say the government should rethink LHA rates.

Dr Chris O’Leary, deputy director for the policy evaluation and research unit at Manchester Metropolitan University, said: “Whilst current debate is focused on changes to the way that landlords reclaim possession of a property, this does not tackle reasons why they need to do so.

“With the demand for rented housing remaining high, our report calls for co-operation between councils, landlords and the government to support and sustain tenancies. This includes ensuring that benefits reflect the realities of today’s rents and work is undertaken to prevent rent arrears building in the first place.”

David Smith, policy director for the RLA, said the report throws into doubt claims landllords “spend their time looking for creative ways to evict their tenants”.

“Most landlords ask their tenants to leave to protect their property. It would be a bizarre business model indeed to search for ways to get rid of your customers,” he added.

Shadow Housing Secretary John Healey said cutbacks to LHA began when the coalition government won power in 2010.

Prior to that the rates were pegged to average rents, he said.

“Deep Tory benefit cuts are one of the root causes of rapidly rising homelessness, alongside the huge loss of affordable homes and cuts to homelessness hostels,” Healey added.

“It shames us all – and Conservative ministers most of all – when over 120,000 children will be homelessness in temporary accommodation this Christmas. Thousands more people will sleep on park benches and in shop doorways in towns and cities right across the country.”

A Government spokesperson said: “Everyone deserves a safe and secure home and we are investing £1.2bn to tackle all forms of homelessness.

“We are reviewing how local housing allowance may affect affordability and we continue to spend £24bn on housing benefit a year while also providing targeted support for low income households.”


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