Welfare cuts have not stopped rents rising, claim

A group of local authorities have said that welfare reforms have failed to bring down private rents, as the Government has claimed.

Instead, they say, rents have risen, with the only beneficiaries being landlords and letting agents.

They say that as a result of higher rents, more money is going into the private rented sector rather than being made available for investment in social or affordable homes.

A report by London Councils, the umbrella group for local authorities in the capital, says that caps on Local Housing Allowance have not cut rents.  

Caps to LHA were introduced in April 2011 and in January 2012, affecting both new and existing claimants by setting all payments at lower rates and setting a ceiling on the maximum.  

Prime minister David Cameron has claimed that rents have come down, but the research by London Councils says that in some London boroughs rents have risen by over 20%, with low-income working households being hit hardest by the reforms.

The report calls for changes to the welfare system that reflect the higher costs of living in London.

Jules Pipe, mayor of Hackney and chair of London Councils, said: “The report shows that to avoid creating a chaotic system where the only beneficiaries are landlords and lettings agents, the Government must ensure its reforms reflect London’s housing crisis.”