Eight in 10 housing benefit awards for single social tenants under the age of 35 are over the proposed ‘Local Housing Allowance cap’, according to research by Shelter.
The charity has used government figures to quantify the potential impact on young single people of plans to cap housing benefit for social tenants in line with private sector Local Housing Allowance (LHA) rates.
According to Inside housing, reporting on this:
“Under the government’s plan, single people under 35 would only be allowed to claim the shared accommodation rate – the amount considered enough to rent a room in a shared house – which is often lower than housing benefit awards. The policy only applies to new tenancies from April 2016 and does not kick in until 2018.
The Shelter analysis shows 136,191 housing benefit awards made to single under-35s in social housing in August last year were over the LHA cap. This is 76% of the total number of single under-35s in social housing claiming housing benefit.
Kate Webb, senior policy officer at Shelter, said the government perhaps “expects social landlords to move tenants into shared housing”.
She said: “This is uncharted territory for many landlords and would undoubtedly create management challenges – not least around allocations. It would also risk cannibalising larger homes that could have been let to families.” She also warned some landlords may reconsider whether to let to younger people without children at all.”
In another Inside Housing Article:
“The planned ‘Local Housing Allowance cap’ will make tower block accommodation difficult to let by pricing out younger benefit claimants, landlords have warned.
Several association chief executives this week said they are looking at redesignating tower blocks for other residential uses because the flats will be difficult to let due to the gap between LHA rates and the combined cost of rent and service charge.
The government is planning to cap housing benefit for social tenants in line with LHA rates, which are used to calculate the amount of benefit received by private tenants.
Under the new rules, which will start in 2018 for tenancies beginning from April 2016, single people aged under 35 will only be entitled to the ‘shared room rate’ – a payment for a room in a shared house.
Tower blocks generally command higher service charges – which are covered by housing benefit along with rent – for facilities such as lifts, cleaning, CCTV and concierges. In addition, they are often occupied largely by younger, single people – who are entitled to lower LHA rates than older people and families.
Geraldine Howley, chief executive of Bradford housing association Incommunities, said: “What is going to hit more than anything is the rule regarding under-35s.”
Bradford has a shared room rate of £58.26 a week, which would not cover the rent for a one-bedroom flat in one of Incommunities’ 32 tower blocks.
“We let [tower blocks] in the main to under-35s and a high proportion are not in work… so it has flagged up an issue for us,” Ms Howley added, and said the association would consider redesignating some blocks as shared accommodation to cope with the problem.
Alison Thain, chief executive of Middlesbrough-based Thirteen Group, which has 20 tower blocks, said: “We will be talking to universities, talking to the hospitals, even if it’s just a few floors we could use in different ways. We are going to have to think very differently about how we use the tower blocks.” The association has previously redesignated a number of its larger properties as one-bedroom flats due to the bedroom tax.
The problem is likely to mainly hit ex-stock transfer landlords in the north of England, where LHA rates are low, and which inherited large numbers of tower blocks from local authorities.
A Department for Work and Pensions spokesperson said the policy “would provide a fairer deal for taxpayers”. ”