Homelessness increases as LHA cuts start to take effect

27 March 2012 Categories: News

Homelessness increases as LHA cuts start to take effect

The first round of LHA cuts that hit parts of the country, including London, last April have started to have the effect that people were dreading.

According to figures released by London Council, the number of households that lost their private rental sector properties because of the reforms rose by 26% during last year, leaving 1680 people registered as living in temporary accommodation such as bed and breakfasts by the end of 2011.

The report, which was aimed at the Leader’s Committee, stated that the current situation would only get worse as more families struggle to afford the rents currently being asked by private landlords. But because landlords have their own financial obligations they are unable to lower their rents to a level that matches the new maximum LHA payouts.

This problem is expected to become apparent in many more cities around the country over the next 12 months as well, as the second round of LHA cuts take effect. And then of course there is the planned Universal Credit Cap due to be introduced during April 2013 that will cap the total amount of benefits claimed by families to £500 per week.

This reform by itself will skyrocket the number of households unable to pay their rental obligations, with the result being increased homelessness and a bleak outlook for the rental market.