Many people argue that the housing benefit bill is too high and that those needing support to find and sustain a home should not be housed in the most valuable properties in central London.
Notting Hill Housing provides 2,500 leased homes in London for homeless households and the rapid introduction of benefit caps for existing tenants will have profound and unfortunate effects for our tenants.
The Department for Work and Pensions has notified all households likely to face a benefits cap. We should receive details soon; until then we can only estimate the impact based on our interpretation of the new rules and our analysis of recent tenant surveys about their circumstances.
The new household benefit cap limits benefit income to a maximum of £500 a week for couples and single parents, and £350 for single people – including housing benefit. From April 2013 this cap will apply to any claimant who is not in receipt of disability living allowance or tax credits. There are no transitional protection arrangements for existing tenants and an estimated 67,000 households across the UK will lose some benefit under the cap.
The majority of affected households are in London, where housing costs are high and rising, and most affected households are within the central boroughs of Westminster, Kensington & Chelsea, Hammersmith & Fulham, Camden and Islington.
Because of the relatively high rent levels in central London, we anticipate that nearly every household will lose the benefit if the cap is applied to them. Effectively this makes the boroughs of Westminster, Kensington & Chelsea and Hammersmith & Fulham unaffordable to benefit claimants. We will have to end their tenancies, and hand their homes back to the private sector.
The cap will make all three, four and five-bedroom properties unaffordable to any household with four or more children and the vast majority of three-bed accommodation unaffordable to households with three children. A couple with three children living in a three bedroom flat in Westminster will certainly receive £500 a week in housing benefit. From April 2013 this will reduce to less than £200 a week.
We believe tenants who are under the age of 35 in self-contained accommodation will receive a subsidy based on the shared room rate. The loss of subsidy on a one-bed self contained unit in Newham equates to £127.61 a week.
We expect that only a quarter of our temporary housing tenants will be exempt from the household benefit cap because the tenant or partner is in receipt of tax credits or someone in the household is in receipt of the disability living allowance.
At Notting Hill we are preparing for 700 households to be affected by the cap when it comes into force next year. This means we face ending 700 of our tenancies and removing households from their communities. We will work with local authorities to try to provide cheaper alternatives but it is a tall order for providers, and a huge issue for the families concerned.
Kate Davies is chief executive of Notting Hill Housing Group
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