Local Housing Allowance (Housing Benefit) Caps: Impact in Camden, Westminster, Haringey, Prime Central London 'Resi'

The rights and wrongs of housing benefit 'reform' continue to provoke argument. But the likely impact of housing benefit caps is now also disputed, writes Paul Coleman.

   Camden Council are reportedly planning to move 761 households - comprising 2,861 adults and children - out of its slice of central London because the government is capping welfare benefit payments at £500 per week. It's said these capped families will no longer be able to afford to pay their rent.

    For instance, Camden offered to rehouse one single mother of four children in Liverpool. Her Camden rent for a two-bedroom flat is £340 a week.  But the coalition government will cap her housing benefit at £204, leaving her to make up the weekly shortfall of £136.

   Families on benefits - including many working on low-paid jobs - will need to find an average £360 per month extra to stay in their Camden central London home.

New home, new school

The impact on the 761 households that may have to move includes an estimate that 900 schoolchildren might have to move home and to a new school - not in London - but in Birmingham, Leicester and even as far as Bradford. But that's only if homes and school places are available in those cities. 

   The average Local Housing Allowance benefit payment to cover the weekly rent for a three-bedroom home in Birmingham and Leicester is  £127.

Camden market

House prices  in Camden have remained high since the 2007-09 financial meltdown. 'Camdenites' earn an average £37,000, way above the £24,000 national average.  

   The borough's wealthier residents have created a Camden market where rents are the fourth highest in England. Camden Council has a long waiting list for its social (council) rented homes.

Social cleansing

Westminster Council says 2,327 households and Haringey Council in north London says 1,000 households might be similarly affected when the benefit caps bite. 

  Critics accuse the government of 'social cleansing' - using the caps to move poorer people out of central London. This leaves more room for the 'High Net Worth Individuals' who invest in central London's 'prime' residential property market.

  The government says the caps redress a moral imbalance where benefit claimants no longer receive taxpayers' money to enjoy a bigger income than many other working families. The government also says local authorities do not have to resort to moving all affected households as individual circumstances mean many families can adapt.

For more on the impact of housing benefit caps, read my feature in 24 Housing magazine

http://www.24dash.com/magazine/issue/2012/02

Paul Coleman, London Intelligence, February 2013