This week’s move by George Osborne to cap benefit rises below inflation at 1% is the final deadly touch in a toxic series of measures likely to lead to unprecedented homelessness in the UK.
The Chancellor’s decision came in the same week that Crisis released a report warning that street homelessness has risen by a shocking 23% in just one year. Every other measure of homelessness has also soared recently with the numbers of homeless families in temporary accommodation up by 44%
These steep rises in numbers of those without a home have come before the impact of coalition cuts to Housing Benefits have largely been felt.
There will be a considerable lag before people made homeless end up either on the streets or presenting as homeless with local councils. Many local authorities will not even accept a homelessness application until someone has been formally evicted from their home. This means many of those affected by the last year’s Housing Benefit cap will be waiting to be evicted before they can get help from the council – and no doubt building up significant debts whilst they wait.
The Housing Benefit cap was implemented depending on when claimants made their initial claim for the benefit, meaning some people will only have seen benefits slashed in the last couple of months. It is likely that virtually none of the recorded rises in homelessness seen so far are due to the vicious cuts to housing benefits, but simply the predictable consequences of a fucked economy.
The new rules for those under 35 – which mean that Housing Benefit will only pay for a room in a shared house – are likely to have now come into force for most claimants. Once again there will be a lag before many affected are picked up in the homelessness figures. Younger people make up one of the largest groups of ‘hidden homeless’, generally those sleeping on friend’s sofas or squatting. For some this temporary support is enough, but for others it can be the start of a decline which ultimately leads to the streets.
Squatting recently became illegal in even abandoned ‘residential’ properties, so this vital lifeline has been cut short.
Next April the overall benefit cap of £500 a week is introduced – no matter where someone lives or the size of their families. This will make much of the South East of England unaffordable for those on benefits with children. If this wasn’t enough the Bedroom Tax, to be introduced at the same time, will see housing benefits cut for people who have a spare room for a carer, or happen to have children who have just left home.
For those hit by this measure, the path to finally losing homes will be long and drawn out. Claimants living on just £70 a week unemployment benefit could find themselves paying £10, 20 or even more each week towards their rent. Few will be able to manage without falling into arrears.
Many people are already paying a significant amount towards rent out of meagre benefits after the Government down-rated Housing Benefit payments to the bottom 30% of the housing market. Just three out of ten properties in any local area are now affordable to those on benefits. Previously Housing Benefit would cover the bottom 50% of rents in the market, so some claimants are stuck in properties which housing benefits won’t pay for and are desperately trying to cover the shortfall themselves.
It is impossible to predict how many people may find themselves homeless over the next two or three years due to the Government’s cuts. The Government themselves estimate 50,000 families will be affected by next year’s benefit cap alone. According to the Children’s Society this could mean 80,000 more homeless children from next April.
It will not just be those on benefits affected by the changes. Housing Benefit is an in work benefit and an increasing number of claimants have full time jobs. The so called fall in unemployment has really just been a rise in workfare, sanctions and part time work. Economic conditions alone would be enough to trigger a housing crisis in an increasingly unaffordable rental market combined with sky-high unemployment.
But the Government aren’t content to stop there. George Osborne’s latest cuts will ensure that the mass exodus into hostels and B&Bs or onto the streets, is now enshrined within the welfare system. Housing Benefit will no longer be pegged to the local rental market, or even inflation as had been first announced in 2010. Despite rocketing rents in some parts of the UK, Housing Benefit will now only rise at a rate of 1% a year.
To place this in context, it has been estimated that London rents soared by 32% in the last three years. A property which cost £200 a week in 2009 now costs on average £264. Under Osborne’s new measures,the amount of Housing Benefit available for that property would have risen by just £6. Even outside of London rents have risen 7% over three years, so someone in a £150 a week property would need to find an extra £6 a week out of their benefits.
This is £6 a week is on top of the shortfall many people already face due to the cuts and before the benefit cap/bedroom tax have been introduced. Crisis estimate the average shortfall facing many Housing Benefit claimants is £23 a week. When Universal Credit is introduced, those on benefits or low incomes may also lose some Council Tax benefit . In the worst case scenario, people on Job Seekers Allowance could find themselves paying out almost half of their £70 a week in rent and Council Tax.
Half a million benefit sanctions were handed out last year, which leave claimants forced to live on £42 a week ‘Hardship Payments’ – and only then if they qualify. When Universal Credit is introduced the number of sanctioned claims is expected to rise. Rent payments are usually still covered during a sanction, but housing benefit often needs to be re-applied for. This can take considerable time and lead to arrears and even eviction. As Housing Benefits increasingly don’t pay the rent, claimants living on £42 a week, could see the bulk of it swallowed up by trying to keep a roof over their heads.
And even those paltry benefit rates are to face a cut in real terms, along with in work benefits such as Working and Child Tax Credits.
It is scandalous that so much of the benefits bill ends up in the pocket of grasping landlords. It is a tragedy just how much social housing provision has been eroded by successive governments. But Housing Benefit is the most vital and life-saving part of the benefits system – keeping a roof over the heads of low paid, sick, disabled, unemployed or retired people alike along with millions of children.
It is not our fault the housing market is so fucked and that rents are unaffordable. Whilst the pampered middle classes gushed about their property prices in the house market boom and buy to let landlords pushed up rents to new heights a social time-bomb was being created which housing benefit ended up paying for.
The victims of rampant property speculation and soaring rents are now to be punished again as Housing Benefits are stripped away. For every latte slurping Tarquin’s property portfolio, there is now a family of homeless children whose lives have been destroyed before they have barely even begun.
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