Loan Shark Warning Ahead Of 'Spare' Room Housing Benefit Cut

Plans to cut the housing benefit of tenants living in homes deemed too large for their needs, could lead to a huge surge in the number of people turning to loan sharks and doorstep lenders as they struggle to pay their bills, campaigners have warned. Tenants may face either downsizing to a smaller home to avoid the penalty or staying put and paying a much higher level of rent from their own resources. But even for those who do look to downsize there is by no means any guarantee they will find a smaller social home to move into. Around 180,000 social tenants in England are 'under-occupying' two-bedroom homes, but just 68,000 one bedroom social homes became available for letting in a single year (2009/10). Currently, around 2.5m people borrow from doorstep lenders at rates often in the region of 272% APR for new customers. A further 200,000 are estimated to borrow from loan sharks, who can charge anything up to 2,000% APR. A majority of those financially excluded are social housing tenants. Read more on the NHF website.