There has been a lot in the news recently regarding changes to housing benefit. From a cap on the amount paid dependent on the property size, to the change in housing benefit for single applicants aged up to 35.

Previously only single applicants aged up to 25 had their housing benefit calculated on what is known as the Shared Accommodation Rate (SAR). This change in the threshold means that 63,500 single 25- to 35-year-olds will now have their benefit calculated on this lower rate.

There is an example of how this change can suddenly affect someone. A tenant is living in a one bedroom flat in Gateshead. They are currently receiving £91.15 per week (£395 per calendar month). Their new housing benefit rate is now £59.50 per week (£258 per calendar month). This equates to a £137.00 per month reduction in housing benefits.1

The Government's proposal on increasing the SAR threshold (August 2011) stated that ‘the difference in rents between the one bedroom self-contained rate and the shared accommodation rate could be significant and we acknowledge that many will move as a result of these changes. Alternatively claimants may meet the shortfall through other income such as employment or savings or a combination of these.’ 2

However, how many tenants affected will actually have savings or ‘other income’?

The proposal did not give any evidence as to the number of those affected who currently had savings or ‘other income’. Likewise it didn’t offer any data regarding the number of properties in the UK that are currently classed as HMO’s (Houses of Multiple Occupancy). It also didn’t give any details as to the number of rooms that would be available for those tenants who would have to move due to the reduction in their housing benefit. It also didn’t suggest any possible housing solutions, such as offering incentives to landlords to convert any current standard houses into HMO’s.

The Government stated in the proposal that they would monitor and evaluate the impact of the threshold change. They also confirmed that they would use survey data and qualitative research to examine the impact on protected groups. They indicated they would also look at broader research, including the independent external evaluation of the HB reforms which is currently being commissioned. However they do not state that they will be commissioning any specific research into the change in housing needs brought about due to the increase in the SAR threshold.

Regarding all the recent HB changes; the Chartered Institute of Housing released their own study3 last week estimating that ‘800,000 homes will be out of the reach of people on housing benefit because of the new government welfare cuts'. They also stated that there will be ‘thousands more claimants than properties that are affordable on benefits alone’ and they raised the possibility that the poor will migrate to ‘benefit ghettoes in seaside towns or the north of England’.

They also analysed how the benefit changes will affect certain councils. For instance in Newham, east London they stated that there will be ‘twice as many claimants as there are available low-cost homes and in Croydon there will be 17,000 people chasing 10,000 properties’.

What could be a glimpse into the future occurred only last week, with Croydon Council confirming that a private developer had offered them flats 200 miles away in Manchester to help house its residents. 4

In its reply to concerns regarding their housing benefit reform, the government has stated that ‘Early indications are that people are not moving out of cities in their droves to cheaper rural areas and that for the vast majority of areas except the most expensive parts of inner and central London, at least 30% of all private rental properties will be affordable.’ Their hope is that their measures will ‘place a lid on spiralling rents and local authorities will continue to work with tenants and landlords to negotiate down rents, which will in turn help to keep properties within reach’5

However without in-depth governmental research into the exact impact these changes are having (and will continue to have), specifically in the area of housing, surely these expectations could be accused of being more in hope, than having any real substance?

1Source: NGU Home Lettings.
2Source: DWP: ‘Housing Benefit equality impact assessment’.
3Source: CIH: ‘Housing benefit cuts will put 800,000 homes out of reach’.
4Source: Inside Housing.
5Source: The Guardian: Government response to CIH Research.