In under two weeks hundreds of thousands of the least well off people in the UK will find a shortfall in their Housing Benefits due to the bedroom tax. At the same time the benefit cap will be introduced in three London boroughs, which will see thousands of London families no longer able to pay the rent. This chaos is to be extended throughout the UK from July.
Changes to Council Tax benefits also come into effect next month leaving people living on as little as £72 a week (or less in some cases) now eligible to pay Council Tax in many parts of the UK. The Benefits Uprating Bill currently passing through the House of Lords will see Housing Benefit rises capped at 1%, despite rents rising by over ten times that figure in some areas. Along with cuts to in and out of work benefits, and the public sector pay freeze, many of the lowest income households are due to see that income shrink on an annual basis.
From October this year Universal Credit will start to be expanded across the UK. Benefit sanctions, meaning people left with nothing and currently running at about half a million a year, are likely to rise due to ever increasing benefit conditionality. Hundreds of thousands more are being impoverished by the Atos regime for sickness and disability benefits. A fifth of disabled people are aset to lose Disability Living Allowance over the coming years.
Universal Credit will feature ‘direct payments’, meaning claimants can no longer have housing benefits sent to direct to landlords. This had led to rocketing rent arrears everywhere it has been tried as claimants already forced to choose between heating and eating are given a large monthly cash payment to pay the rent. Instead it pays for nappies, or a broken washing machine, or debt repayments to high street loan sharks. Housing Associations have warned they are cutting the number of new homes available due to stockpiling cash reserves to pay for the inevitable spate of evictions. So called ‘affordable’ house building collapsed last year.
Even before these changes every measure of homelessness is rising. Already many councils can’t cope. Westminster Council is housing families in £3k a week hotels after they have been evicted due to the housing benefit cuts which have already taken place.
Anyone who has been paying attention will point to both the chronic shortage of council housing and soaring rents as two of the key factors behind the housing crisis. George Osborne’s answer to the problem is higher rents and less council houses.
Osborne yesterday extended the discount for London tenants who wish to buy their council property to £100,000. What little social housing remains the Chancellor is desperate to sell off. Once all right to buy houses sold had to be replaced by a new council house. This rarely happened in practice, but that was the idea. But even that has been thrown out of the window. New homes designed to replace those flogged off will have rents set at 80% of the local market and fixed term tenancies. The long established tradition of genuinely affordable housing on secure tenancies managed by Local Authorities – and often making them a profit – has been glibly demolished by this Government.
Not content with this Osborne has also introduced a series of measures which risk wildly inflating the housing market even further. Gideon wants to help more people buy houses by making them more expensive. His Government backed mortgage subsidy, even available for those looking to purchase half a million pound mansions, is likely to lead to a bonanza for landlords. Whilst he has claimed this new scheme will not be on offer for specifically ‘buy to let’ mortgages, he seems relaxed about it being available to those who already have one or even more houses. Which simply means a little paper shuffling on the part of grasping landlords and bankers and the scheme will end up being used to buy properties to rent out. Or leave empty as in the case of some of the most valuable properties in London, bought up as investments with laundered money and then left uninhabited.
The only predictable outcome to Osborne’s scheme is higher rents in both the social and private sector. For now Housing Benefits – meaning tax payers – will pick up the tab for shoveling billions into the pockets of landlords. The already much maligned housing benefit bill could be set to soar to levels that can barely be imagined now.
According to The Guardian, Osborne’s plan to avoid this could be to cap social security spending if they win the next election. Should this happen then it seems inconceivable that the current legal protection to prevent children, pensioners and disabled people from street homelessness could be maintained. It will be just too expensive. This is the choice the free market offers on housing. Tens of thousands of homeless children or tens of billions paid to landlords by the state.
Of course this whole tragic mess could be halted overnight if everybody stopped paying their rent.
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