After Government reforms puts a rent cap on Housing Benefits

A number of local families receiving housing benefit could be forced out of their homes and into cheaper accommodation after the Chancellor announced that rent paid is to be capped.

In his budget speech George Osbourne said that the new Government would introduce maximum limits on housing benefit - £280 a week for a one-bedroom property to £400 a week for a four plus bedroom.

The reforms, which come into effect in October 2010, will save taxpayers an estimated £150 million a year by making the more expensive properties available to housing benefit claimants no longer eligible.

It is believed that the benefit cap will affect around 13,000 households, most of which are in the capital forcing families to move to a less expensive area or to negotiate a lower rent. In theory it could mean an end to the use of Housing Benefit tenants in private properties in the area.

Acton found itself at the centre of a media storm when it was revealed that an Afghan family was living in a £1.2million home paid for by the taxpayer. More than a year after a minister pledged to throw them out, they are still there.

Toorpakai Saiedi and her seven children receive £170,000 a year in benefits - £150,000 of which goes on renting the property. When details of the house and benefit payments emerged, then Work and Pensions Secretary James Purnell ordered a complete overhaul of the system.
The DWP had already introduced new guidelines on council homes that cap rent at the value of a five-bedroom house meaning landlords renting houses with six or more bedrooms to council tenants received the average rent of a five-bedroom home in the area.

This latest change to Housing Benefit effectively means that the families like the Saiedis will be forced to seek alternative accommodation.

The Government has pledged not to kick families out of their homes giving them up to six months from their review date to find more appropriate accommodation in a bid to make the system ‘fair, both to families in need and the taxpayer.’

July 8, 2010