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You can find the current article at its original source at http://www.theguardian.com/society/2015/sep/10/low-income-families-private-housing-rent-benefit-freeze
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| Low-income families in private housing face large benefit shortfalls | Low-income families in private housing face large benefit shortfalls |
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| More than 300,000 low-income working families face a housing benefit shortfall, leaving them in some cases hundreds of pounds behind on rent each month by 2020 as a result of government plans to freeze support. | More than 300,000 low-income working families face a housing benefit shortfall, leaving them in some cases hundreds of pounds behind on rent each month by 2020 as a result of government plans to freeze support. |
| Research by housing charity Shelter predicts that 80% of working English households claiming support to help meet soaring private-sector rents will be affected by the four-year housing benefit freeze announced in July’s budget. | Research by housing charity Shelter predicts that 80% of working English households claiming support to help meet soaring private-sector rents will be affected by the four-year housing benefit freeze announced in July’s budget. |
| The cash shortfall will affect families living in places not traditionally associated with high rents, such as Manchester, Birmingham and Bristol, as well as expensive postcodes in London and the south-east. | The cash shortfall will affect families living in places not traditionally associated with high rents, such as Manchester, Birmingham and Bristol, as well as expensive postcodes in London and the south-east. |
| The research estimates typical rents for a two-bed home at the lowest end of the market in each local authority area in 2019-20, and compares this figure with maximum local housing allowance (LHA) rates for each area, which will be frozen from April 2016. The LHA is used to work out housing benefit for tenants who rent privately. | The research estimates typical rents for a two-bed home at the lowest end of the market in each local authority area in 2019-20, and compares this figure with maximum local housing allowance (LHA) rates for each area, which will be frozen from April 2016. The LHA is used to work out housing benefit for tenants who rent privately. |
| The gap between LHA rates and rents will be extreme in high-rent areas such London. In Westminster, for example, Shelter estimates rents on a two-bed flat could rise to £415 a month above current levels in four years’ time. The gap faced by households renting privately and getting LHA in this market, working or jobless, will be £1,440. | The gap between LHA rates and rents will be extreme in high-rent areas such London. In Westminster, for example, Shelter estimates rents on a two-bed flat could rise to £415 a month above current levels in four years’ time. The gap faced by households renting privately and getting LHA in this market, working or jobless, will be £1,440. |
| But the study also shows that the monthly gap between private rents and LHA on two-bed homes in the cheapest areas of each authority will be significant in growth areas such as Cambridge (£529), Manchester (£240), Bristol (£236), Luton (£155) and Birmingham (£107). | But the study also shows that the monthly gap between private rents and LHA on two-bed homes in the cheapest areas of each authority will be significant in growth areas such as Cambridge (£529), Manchester (£240), Bristol (£236), Luton (£155) and Birmingham (£107). |
| Many of these places “are key job-creating cities, central to employment growth. Many of the working families affected need to live in the vicinity of these places because it’s likely to be where their jobs are,” the study says. | Many of these places “are key job-creating cities, central to employment growth. Many of the working families affected need to live in the vicinity of these places because it’s likely to be where their jobs are,” the study says. |
| “This isn’t about expensive postcodes where you would expect rents to be expensive but the much wider problem of the ridiculous cost of housing and a private rental market that is not fit for purpose.” | “This isn’t about expensive postcodes where you would expect rents to be expensive but the much wider problem of the ridiculous cost of housing and a private rental market that is not fit for purpose.” |
| Shelter fears that with average earnings unlikely to keep track of rent increases in many areas, households unable to cover significant shortfalls in housing support will be forced to either move to a cheaper authority, share homes with other families, or downshift into accommodation too small for their needs. | Shelter fears that with average earnings unlikely to keep track of rent increases in many areas, households unable to cover significant shortfalls in housing support will be forced to either move to a cheaper authority, share homes with other families, or downshift into accommodation too small for their needs. |
| Campbell Robb, the chief executive of Shelter, said: “This could push hundreds of thousands of working families already struggling to keep up with relentless rent rises and benefit cuts to breaking point. | Campbell Robb, the chief executive of Shelter, said: “This could push hundreds of thousands of working families already struggling to keep up with relentless rent rises and benefit cuts to breaking point. |
| “For those who will be hit by the freeze, housing benefit will fail to bridge the growing gap between climbing private rents and incomes that simply can’t keep up.” | “For those who will be hit by the freeze, housing benefit will fail to bridge the growing gap between climbing private rents and incomes that simply can’t keep up.” |
| Of England’s 326 local authorities, Shelter estimates 3% will see a projected affordability gap of more than £500 a month in the bottom quarter of the market by 2019-20, 15% more than £200, 30% more than £100, and 52% more than £50. In 18% of areas, mainly in the north and Midlands, there will be no gap. | Of England’s 326 local authorities, Shelter estimates 3% will see a projected affordability gap of more than £500 a month in the bottom quarter of the market by 2019-20, 15% more than £200, 30% more than £100, and 52% more than £50. In 18% of areas, mainly in the north and Midlands, there will be no gap. |
| One possible consequence of the freeze could be to force landlords to lower rents, although Shelter points out that the government has introduced four separate measures to reduce LHA since 2012, but none of these have failed to arrest rising private-sector rents in areas of high demand. | One possible consequence of the freeze could be to force landlords to lower rents, although Shelter points out that the government has introduced four separate measures to reduce LHA since 2012, but none of these have failed to arrest rising private-sector rents in areas of high demand. |
| Shelter fears that in areas where young professionals who cannot afford to buy a home are queueing up to rent, landlords may withdraw from the housing benefit market altogether. | Shelter fears that in areas where young professionals who cannot afford to buy a home are queueing up to rent, landlords may withdraw from the housing benefit market altogether. |
| Annual rent increases in the bottom quartile of areas like Hackney in east London, Bath, Warwick, Manchester, Cambridge and Bristol averaged over 5% a year between 2011-12 and 2014-15. Private rents have increased in 79% of England since 2011. | Annual rent increases in the bottom quartile of areas like Hackney in east London, Bath, Warwick, Manchester, Cambridge and Bristol averaged over 5% a year between 2011-12 and 2014-15. Private rents have increased in 79% of England since 2011. |
| The study’s projected rents are calculated on an assumption that bottom quartile rents will continue to rise between now and 2020, but at 85% of the rate seen over the past five years. | The study’s projected rents are calculated on an assumption that bottom quartile rents will continue to rise between now and 2020, but at 85% of the rate seen over the past five years. |
| More than 4m households in England received full or partial housing benefit in England (4.8m in the UK), at an annual cost of £24bn, latest figures show. Private-rented sector household claimants are the fastest growing cohort of this group accounting for a fifth of the total number. Private-rented sector claimants are normally only allowed to rent in the bottom 25% of each local rental market. | More than 4m households in England received full or partial housing benefit in England (4.8m in the UK), at an annual cost of £24bn, latest figures show. Private-rented sector household claimants are the fastest growing cohort of this group accounting for a fifth of the total number. Private-rented sector claimants are normally only allowed to rent in the bottom 25% of each local rental market. |
| The Shelter research is based on official Department for Work and Pensions (DWP) data. It identifies the number of households receiving housing benefit in May 2015 who rent privately, are in work, have dependent children and live in an area of the country that has seen rents rise in the last four years. | The Shelter research is based on official Department for Work and Pensions (DWP) data. It identifies the number of households receiving housing benefit in May 2015 who rent privately, are in work, have dependent children and live in an area of the country that has seen rents rise in the last four years. |
| Tenants in social housing are not affected by the LHA changes. | Tenants in social housing are not affected by the LHA changes. |
| The charity fears that housing benefit is becoming increasingly detached from both family circumstances and the reality of the private rental market. It said: “Freezing housing benefit without tackling the sky-high cost of housing in this country does nothing but fan the flames of our deepening crisis. | The charity fears that housing benefit is becoming increasingly detached from both family circumstances and the reality of the private rental market. It said: “Freezing housing benefit without tackling the sky-high cost of housing in this country does nothing but fan the flames of our deepening crisis. |
| “The only way for the government to break this cycle is to invest in building homes that people on lower incomes can actually afford.” | “The only way for the government to break this cycle is to invest in building homes that people on lower incomes can actually afford.” |
| A government spokesman said: “Our reforms are designed to ensure that people on benefits face the same choices as everyone else. | |
| “We continue to spend around £24bn on housing benefit each year and have already provided local authorities with £500m of funding to support people transitioning to our welfare reforms, with a further £800m to be provided over the course of this parliament. |