Caps on housing benefit driving private tenants out, says London borough

Friday 17th August 2012

A London borough has said that although one-third of private tenants on housing benefit have hit problems since caps were introduced in April last year, homelessness has dropped.

Camden Council said that over 30% of tenants receiving Local Housing Allowance have either had to move out or make up the shortfall out of ‘other income’.

Local Housing Allowance – paid to housing benefit tenants in private rental accommodation – is capped to a maximum of £400 per week for a four-bed home, with a three-bed home capped at £340 a week, a two-bed at £290 and a one-bed home at £250.

Camden Council has now set out the impacts of these caps.

Its paper says that of the 3,384 households in Camden claiming LHA in April 2011, 1,573 were claiming levels above the cap.

By last month, 33% of those were no longer claiming LHA in the borough, with Camden believing they had moved or had met the shortfall from other income.

It found that 60% were still claiming LHA in private rented accommodation in Camden.

Camden is reporting no increase in the numbers of statutory homeless applications and found th applications actually fell in 2011/12 compared with the previous year.

Camden also said there was no evidence that private rents have dropped but that landlords may have negotiated to retain individual tenants.

However, the council warned that the shortfall between benefit and private rents will worsen next year when a new cap of £500 per week in total benefits paid per household is introduced.

It said that over 1,100 households in the borough will be affected and will lose on average £100 income a week.