As the Welfare Reform Bill is debated in the House of Lords housing campaigners have released analysis that questions government assumptions on rent inflation. Two leading bodies call for planned housing benefit cuts to be re-examined. A new report from the Chartered Institute of Housing (CIH) and the British Property Federation (BPF) demonstrates that, contrary to government claims that rises in the housing benefit bill are caused by landlords increasing rents in order to take advantage of pre-determined benefit levels, the more likely explanation is a change in the make up of claimants as more families are affected by the recession in expensive areas such as London and the South East. The study of amounts payable for the local housing allowance (LHA) during an eighteen month period shows that rates fell in 61% of areas. This demonstrates that the LHA regime is being unfairly targeted for the rise in the welfare bill, while many private sector landlords have actually reduced their rents during the period studied.
This analysis runs contrary to the comments made by Welfare Reform Minister Lord Freud in his evidence to the Work and Pensions Inquiry on the Budget 2010 reforms. He quoted figures that showed housing benefit claimants’ payments went up 3 per cent while the property index declined by 5 per cent from November 2008 to February 2010. While the figures were accurate, his interpretation ignored other factors in the mix – especially the changing geographical spread of claimants - which were more likely to have contributed to the rising bill. Download a copy of the report from the CIH website.
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