Time to end the freeze
Posted: August 29, 2018 Filed under: Homelessness, Housing benefit, Local housing allowance Leave a commentOriginally published on August 29 on my blog for Inside Housing.
The freeze on the Local Housing Allowance (LHA) is a £1.2 billion question for which the answer seems obvious.
The problems detailed in analysis by the Chartered Institute of Housing (CIH) published on Wednesday are severe and they are getting worse.
LHA rates are midway through a four-year freeze that is the culmination of seven years of austerity. The result is that they have completely lost touch with the rents they were meant to cover.
The CIH analysis shows that 90% of LHA rates now fail to cover the rent of the cheapest 30% of private rented homes (bear in mind that this was itself a cut from the 50th percentile and that LHA was originally designed to enable tenants to ‘shop around’ for cheaper rents).
That leaves tenants facing rent shortfalls that grow larger with each year of austerity: outside London, two out of every three LHA shared accommodation rates have a weekly shortfall of £4 or more and half of other LHA rates are short by £10 or more; in London, the shortfalls for shared accommodation are more than £10 a week in every LHA area and at least £30 for all other homes.
April arrives with some rare good news
Posted: March 29, 2018 Filed under: Help to Buy, Homelessness, Housing benefit, Local housing allowance, Mortgages, Private renting, Uncategorized, Universal credit Leave a commentOriginally published on March 29 on my blog for Inside Housing.
Sometimes it feels like I’ve written a blog at this time every year with the headline ‘April is the cruellest month’.
It’s not that I have a TS Eliot fixation nor (I hope) that I endlessly repeat myself but because ever since 2010 the start of the financial year seems to have meant yet another benefit cut or housing policy change to cope with.
This year is a bit different not so much because there is no bad news but because there is some good news as well. Here are some examples:
- The u-turn on the withdrawal of support for housing costs for 18-21 year olds under universal credit announced on Thursday. This was a cumbersome policy that required significant exemptions and barely saved any money but it’s still a significant change to the original pledge to make young people ‘earn or learn’.
- The Homelessness Reduction Act passed in 2017 applies from April 3. The legislation should be a big step forward in ensuring that more people get help earlier but despite a recent announcement on funding there are still well-founded concerns about whether councils have the money to implement it.
- Claimants already getting housing benefit who move on to universal credit will from April be paid an additional two weeks of housing benefit. That may not be much consolation for the (in theory) five-week wait for their first universal credit but the payment (worth an average of £233) should ease the transition a bit –and it is not recoverable.
- It will be unlawful for landlords to give new tenancies on the least energy efficient property from April 1 – all rented property will have to qualify for at least an Energy Performance Certificate rating of E so (in theory) tenants will no longer be stuck paying high heating bills for the worst F and G property.
- More measures introduced against rogue landlords in the Housing and Planning Act 2016 come into force, including powers for councils to issue banning orders against the worst offenders and implementation of a database of landlords and letting agents convicted of some offences.
Bear in mind too that it’s not so long ago that I would have been writing about plans to apply a Local Housing Allowance (LHA) cap to social and supported housing from…April 2018.
For all that good news, though, the suspicion remains that it will at best mitigate the impact of policies already implemented and still in the pipeline.
The real Budget agenda is clear
Posted: November 22, 2017 Filed under: Affordable housing, Budget, Council housing, Land, Local housing allowance, Universal credit | Tags: Philip Hammond Leave a commentPhilip Hammond’s Budget contains some big numbers and ambitious promises on housing but you don’t have to delve very far to find the real priorities.
Contrast, for example, what’s happening with housing, tax and welfare, two different measures that were heavily predicted and one that was desperately needed.
Stamp duty is being cut, but the chancellor has gone further than the expected holiday by abolishing it completely for first-time buyers of homes worth up to £300,000 or the first £300,000 of homes worth up to £500,000. The cut applies from now and will cost £3bn by the end of 2022/23.
Problems with universal credit are being addressed with measures including the scrapping of the seven-day waiting period, making advances easier to get and allowing continued payment of housing benefit for two weeks after a universal credit claim. The total cost is £1.5bn by 2022/23 and there is another delay to the rollout.
The universal credit changes are welcome but will still leave claimants potentially facing destitution and people in work thousands of pounds a year worse off than they would have been under the previous system.
A look ahead to the Budget part three: welfare and tax
Posted: November 20, 2017 Filed under: Benefit cap, Budget, Local housing allowance, Tax, Universal credit Leave a commentOriginally published as a column for Inside Housing on May 20.
Some very big questions on housing, welfare and tax are looming ahead of this Budget.
If there is not the same sense of raised expectations that surrounds the prospects for land and investment, the answers given by Philip Hammond on November 22 will still go a long way to determining what type of housing system we will have going into the 2020s.
I’ve written many times before about the way that the aftermath of the financial crisis in 2008 and the policies adopted under George Osborne since 2010 have combined to create a system in which older and better-off home owners have gained at the expense of younger and poorer renters.
A piece in the Financial Times last week used figures from the Resolution Foundation to quantify just how much: housing costs for households below average incomes rose by £714 between 2007/08 while they fell by £271 for those on above average incomes. The biggest gains went to the richest 10% of households, whose average housing costs fell by £1,206.
And that these figures do not include substantial increases in housing wealth over the same period as house prices have risen.
Many factors have driven this including falling rates of home ownership and rock bottom mortgage rates but policies on tax and welfare set by central government have also played a part.
So what could Hammond do to redress the balance?
Time for ministers to listen on the LHA cap
Posted: May 2, 2017 Filed under: LHA cap, Local housing allowance, Supported housing Leave a commentOriginally posted on May 2 on my blog for Inside Housing.
When not one but two all-party committees of MPs call on ministers to think again about a controversial policy you might think they would listen – but will they?
The Work and Pensions and Communities and Local Government Committees say the government should scrap its plan to impose a Local Housing Allowance (LHA) cap on supported housing and pay top-up funding via local authorities and devolved administrations.
Ministers claim the intention is not to save money but to ensure better value for money and monitoring of the quality of services.
But the MPs conclude that ‘the funding proposals, as they stand, are unlikely to achieve these objectives’ and that LHA is ‘an inappropriate starting point for a new funding mechanism’.
Watching the benefit cap
Posted: April 6, 2017 Filed under: Benefit cap, Local housing allowance, Welfare reform Leave a commentOriginally posted on April 6 on my blog for Inside Housing.
What did see when you watched last night’s Panorama on the benefit cap?
Most people reading this here will, I think, have seen the impact of an arbitrary policy that leaves thousands of people with 50p a week towards their rent.
But outside my timeline on Twitter the view was very different. Roughly 95 per cent of tweets with the hashtag #benefitcap were hostile, but to the people featured in the programme rather than the policy.
There is nothing new in this divide of course – exactly the same thing happened with Benefits Street and How to Get a Council House and a Dispatches documentary on the cap last month– but this was an hour on BBC One on primetime.
Part of the problem lay with the way that Panorama framed the issue. This was clear in the first two minutes.
