Newsroom

Property industry welcomes Housing Benefits review

The property industry has welcomed the announcement by the welfare reform minister, Lord Freud, that there is to be a “comprehensive and thorough” independent review into the effects of cutting Housing Benefits.

Responding to a motion in Parliament tabled by Lord Best, Lord Freud stated: “I make a firm commitment to the House that we intend to commission independent, external research to help us evaluate the impact of the reforms”.

The announcement means government proposals subject to the review include the:

·         removal of the five bedroom Local Housing Allowance rate

·         introduction of absolute cap on weekly rates

·         removal of £15 weekly Housing Benefit excess

·         inclusion of an additional bedroom for those with need for overnight care

·         setting of Local Housing Allowance rates at the 30th percentile

Lord Freud went on to state that other issues to be covered in the review would be homelessness, shared room rate and houses in multiple occupation and people with disabilities and working claimants.

Interim results are expected in the summer of 2012.

Ian Fletcher, director of policy for the British Property Federation, said: “We welcome this announcement and would urge government to hold off on further planned waves of reform until the interim results of the review are made available.

“By admitting that a review is needed, it would now be a gamble to proceed with further reforms until the findings of the review are clear. By accepting Lord Best’s motion the government is admitting it does not really know the likely impact of cutting housing benefits and should proceed carefully therefore.”

For further information or to organise an interview please contact:

Patrick Clift, Media and Public Affairs Manager, the British Property Federation, on 07834 439 505, or pclift@bpf.org.uk

Paul Sweeney, Media Assistant, British Property Federation, psweeney@bpf.org.uk  – 020 7802 0113

Notes to editors:

Lord Best’s Motion -

To resolve that this House considers that because of the uncertain impact on children, homelessness and local authority resources of the Housing Benefit (Amendment) Regulations 2010 (SI 2010/2835) and the Rent Officers (Housing Benefit Functions) Amendments Order 2010 (SI 2010/2836), the Government should commission an independent review in their effects, to conclude one year after they have come into force, and annually thereafter, and present the report of each review to both Houses of Parliament. (http://www.publications.parliament.uk/pa/ld201011/ldhansrd/text/110124-0003.htm#1101255000072 )

Freud in response -

I want to turn to the important issue of the monitoring and evaluation of these changes. I am very grateful to the noble Lord, Lord Best, for his timely Motion. I am very happy to agree to his proposal for an independent review. I make a firm commitment to the House that we intend to commission independent, external research to help us evaluate the impact of the reforms. This review will cover all the areas that the noble Lord outlined in his Motion. I can assure the House that it will be comprehensive and thorough and, of course, I readily agree that the outcome of the evaluation should be presented to both Houses, together with a written ministerial statement. Among the issues that it would cover-these were points raised by noble Lords-will be homelessness and moves; the shared room rate and houses in multiple occupation; what is happening in Greater London; what is happening in rural communities; what is happening in black and minority ethnic households; large families; older people; people with disabilities and working claimants. That is what this review will cover.

(http://www.publications.parliament.uk/pa/ld201011/ldhansrd/text/110124-0003.htm#1101255000065 )

The proposed chances to housing benefit which will require primary legislation are as follows.

From April 2013:

* up-rate local housing allowance rates in line with the consumer prices index rather than base them on local rental values;

* restrict housing benefit for working age social rented sector customers who are occupying a larger property than their household size and structure would warrant;

* reduce by 10 per cent housing benefit paid to customers who claim jobseeker's allowance for a period which exceeds 12 months; and

* reduce expenditure on council tax benefit by 10 per cent and localise it from 2013-14, giving councils a greater stake in getting people back to work and discretion to target benefits to local priorities, while protecting the most vulnerable

The following proposed changes will be achieved through secondary legislation.

From April 2011: ----

* restrict local housing allowance levels to the 4 bedroom rate instead of the five bedroom rate; ---- introduce caps for each property size to address excessively high rents to-£250 a week for a 1 bedroom property; £290 a week for a 2 bedroom property; £340 a week for a 3 bedroom property; and £400 a week for a 4 bedroom property or larger; ----

* remove the up to £15 weekly excess currently payable within the local housing allowance rules to customers whose rent is less than the local housing allowance rate; and ----

* include in the size criteria an additional bedroom for a non-resident carer where a disabled customer has an established need for overnight care. ----

From April 2011 to April 2014 stage increases in the rates of non-dependant deductions from April 2011. By April 2014, these increases will bring the rates to the level they would have been had they been fully uprated since 2001 to reflect growth in rents and council tax. ----

From October 2011 set local housing allowance rates at the 30th percentile of rents in each broad rental market area, rather than the median. ----

From April 2012 increase the age threshold for the local housing allowance shared room rate from 25 years to 35 years.

Tweet