The potential impact of the government’s housing benefit cap for the private rented sector has created a rift in political and social thinking since the government’s announcement in April.
Westminster Council has long campaigned for greater fairness to the system and we believe the cap will deliver this.
It isn’t right that the taxpayer is subsidising others to live in some of the most desirable real estate in the world, with a rent value of up to £2,000 a week, despite having had no prior connection or a particular need to come into the area.
The issue is not with the people who have been claiming high benefit – it is the system itself that is at fault.
The cap will mean that some families will have to move from their homes. We have over 5000 households in Westminster living in properties with rents that will be above the new caps. We also have the largest difference between the rents charged and the new caps. £400 a week for a four-bed flat, or £340 for a three-bed, will simply not be sustainable for many.
However, if Westminster can handle this change then, I believe that any area can. I would temper those predicting a mass-migration of families from central London. Some families will need to move but not necessarily outside their borough. There are properties at lower rents in less affluent areas of Westminster that are within the new caps and, indeed, our housing teams are currently placing people in them.
There is also extensive evidence that rents have been influenced by housing benefit levels, particularly leaseholder properties on our estates and properties in our less expensive areas. It does not make sense that a flat on one of our most deprived estates rents for the same as one with the same number of bedrooms in a street in Pimlico. I therefore believe that as benefit levels come down, so rents in certain parts of the city will also come down.
While this may prove the case, it still remains that too often households are charged too much for properties that are not in desirable areas and do not match the quality of the home, with landlords cashing in because of a geographical proximity to sort-after addresses. These are the typical properties it is reasonable to expect someone claiming housing benefit should be able to live in.
We are working with landlords to negotiate lower rents with these tenants. In one case we have already delivered a reduction from £800 per week to £400. But this is where landlords have to take responsibility. The must recognise their role in providing rents that are fair and reasonable. They should also heed the benefit of having long term residents in place, something existing tenants will offer, should they be given the opportunity to stay.
Where families do have to move we will work to support all those affected. Every household will be offered assistance from the council. We can provide advice on dealing with landlords and other financial matters. Where necessary we can help to smooth children’s transition between schools.
We also have access to the Discretionary Housing Payment Scheme (DHPS), which enables us to use money from central government to help the most vulnerable people bridge the gap between their benefits payments and their rent payments. Cases will be judged on their individual merits, but it is clear that the families with children at a critical stage of education and long term Westminster residents will be the priority cases. But we cannot help everybody in this way. Nor can any local authority, there is not a finite amount of money available.
The government has promised greater fairness by ensuring there is no option for benefit claimants to live in million pound homes at the taxpayers expense. Local government will drive fairness for those most in need of support and with true need to continuing living in their current areas. Now landlords need to bring a new realism to low and medium rent prices.