Tory party proposals to lower the cap on benefits would make housing in the capital “unaffordable” to families on benefits, Landlords have warned.
Landlords warn that if the Tories win a majority in the next general election and followed through on their pledge to reduce the benefit cap from £26,000 a year to £23,000, families on benefits would be forced out of London because rents would no longer be affordable.
Housing Associations and other social landlords are legally required to charge ‘affordable’ rents at no more than 80% of the local market value. But housing costs in London are so high, compared to other parts of the UK, that lowering the cap on benefits would mean that only people in work – and earning a reasonable wage – would be able to afford to stay in the capital.
The average rent in London currently stands at £1,466 a month, compared to £728 for the rest of the UK. Rents have risen 8.2% across the country in the last year.
Lowering the cap on benefits would affect around 70,000 households. The majority of those affected will be living in London and the South-East. Around 40,000 households who have not yet been affected by welfare cuts would be hit for the very first time.
Paul Hackett, chief executive of Amicus Horizon, told Inside Housing: “I think there would still be demand for affordable rents from people who are in work, but predominantly it wouldn’t be affordable to those on benefits.”
A chief executive of another housing group, who did not want to be named, warned: “It would mean we couldn’t develop affordable rent homes in London anymore. It’s a mad policy.”
Brendan Sarsfield, chief executive of Family Mosaic, said that the government wants them to charge no more than 80% but also wants to cut welfare spending, while leaving it to landlords to work out they would continue to house people on benefits.
Sam Lister, policy chief at the Chartered Institute for Housing, added that the policy could have far-reaching impact as families with children living outside of London could also be affected.
Opponents of the benefit cap have accused the Tories of “social cleansing”, claiming that David Cameron is seeking to turn London into a playground for the rich.