Grants Shapps’ claims that Housing Benefit caps would lead to lower rents have been demolished by a report published this week by the National Housing Federation (NHF).
The NHF warn in stark terms that rents are soaring, a trend they believe will continue and lead to millions of people unable to afford to buy, or rent a home in the near future. The Evening Standard also warned last week that rents across London are at an all time high, having risen 6.2% in the last year. In Hammersmith and Fulham, one of the boroughs most impacted by the government’s caps on Housing Benefit, rents have soared by 15%.
Speaking about the housing benefit caps, Grant Shapps, when he was Minister for Housing, claimed that: “Rather than some of the catastrophic predictions that have been made, what’s much more likely is that rents will start to fall.”
The Housing Benefit caps were justified by lurid stories claiming people were living in Chelsea mansions whilst claiming benefits at a cost to the tax payer of thousands every month. The truth was that this represented a literal handful of homeless families who were in emergency temporary accommodation in expensive ares of London.
The housing benefit caps were set at a far lower rate than the cost of a Kensington town house and resulted in much of London becoming unaffordable for those claiming full housing benefit awards. The impact of these changes has barely begun to be felt and already every measure of homelessness in rising.
Whilst central London is socially cleansed an influx of housing benefit tenants into outer London boroughs and the home counties will mean soaring demand for rental properties. The impact of the housing benefit caps will be higher rents for everybody as competition for what few low cost rental properties exist intensifies.
The National Housing Federation also report on the huge rise in the number of people claiming Housing Benefit who are in work. In just three years the number of people claiming the benefit to top up wages has grown by 417,830 people. According to the report this number is increasing by 10,000 people a month.
Whilst rising rents are undoubtedly to blame for some of this increase, it hides a larger truth. Unemployment, we are led to believe is falling. Yet the number of people who need to claim Housing Benefit, a benefit based on income rather than employment status, is rocketing.
This apparent paradox is easily explained. The fall in unemployment has been largely down to people being sent on workfare, part time jobs, and the record number of people registering as self-employed. All of these people still need to claim Housing Benefit, because even if they are ‘officially’ working, they aren’t making any fucking money.
The Government plans even more cuts to Housing Benefits, with the threat to remove the right to a home for those under 25. Already people under 35 are now only permitted to claim for a room in a shared house. A perfect storm is coming which may yet see record numbers of homeless people once again hitting the streets of London and other large cities.
Despite the brutal cuts the Housing Benefit bill is rising. The Government’s policies so far have led to more homelessness, higher rents and more government spending on housing benefits. The only people to benefit have been greedy landlords (like Chris Grayling) who are pulling out all the stops to cash in on this Government’s housing shambles.