Welfare reform driving poor out of London, says CIH

The CIH, which conducted research on housing for its 2014 UK Housing Review, has looked at how changes to local housing allowance which came into force for new claimants in April 2011 have affected the situation across the country. 

The reforms in April 2011 moved LHA rates to a lower level, reduced the rates for single people aged 25 to 34, and imposed a maximum cap on LHA rates which ranges from £250 for a one-bedroom home to £400 for a four-bedroom home per week.

The UK Housing Review research shows that in Kensington and Chelsea, the number of people claiming housing benefit in the PRS has fallen by more than a quarter since March 2011 and in Westminster by nearly a third, in contrast to the increase in housing benefit claims across London and Great Britain as a whole (see table, numbers taken from the UKHR research).

Across inner London, the number of housing benefit claimants in the PRS has fallen by 5.2 per cent, whereas the number of claimants has risen across the whole of London by 3.9 per cent. Across Great Britain the number of claimants has risen by 6.4 per cent.

Grainia Long, chief executive of CIH, said: ‘The combined impact of high rents and local housing allowance reform means that poorer families are effectively being priced out of the private rented sector in some areas of London. 

‘To find a more affordable home people may be forced to move long distances away from where they work – which could make it difficult to hold down their job in the long term – and from their support network of family and friends.

‘It cannot be right that some areas of the capital are becoming the exclusive preserve of the wealthy elite or that people on lower incomes are simply unable to afford to live in the places where they work. Increasing the number of new homes we build is vital if we are to have any hope of sustaining mixed communities.’

To read more about the private rented sector click here.