They should get rid of the housing benefit cap!

The Elephant and Castle neighbourhood is being physically, socially and ethnically transformed. This started with the demolition of the Heygate estate, a classic for stigmatised perceptions of council housing and the people who live in it. As the local 35% Campaign has meticulously documented, a succession of promises to Heygate residents were broken to arrive at a situation where 1,214 council homes were demolished, to be replaced with 2,704 new homes, of which only 82 (3%) are for social rent. The HA partner was London and Quadrant. To be eligible for the cheapest one-bedroom home built by them on the Heygate site, people needed a minimum household income of £57,500. The average household income in that part of Southwark is £24,324 1,214 council homes replaced with 82 social rent homes.

I think there should be a cap, there has to be, but perhaps it needs revisiting more frequently so it keeps track with rising rents. I agree the answer is more and better social housing, good old fashioned council houses, but not to be sold on this time.

Before the cap there was no incentive for tenants on benefits to look for place with a cheaper rent.

How do you think the business of renting a property works?

The housing market is already massively skewed by subsidised rents. It bears little relation to salaries because so many are getting their rents paid for them.
People have to earn a professional salary around my area just to pay the rent on a 3 bed. (£2.2k average). Local allowance is £1750. When there aren’t enough houses to go around it’s right that people who pay for themselves out of their taxed income have some sort of advantage otherwise what’s the point in working?

Indeed. More good quality rental houses at low rents is essential to solve this problem. But we need to reduce demand too.

That horse has long since bolted.

So taxpayers are subsidising landlords mortgages? Err no

Plenty of countries manage public housing so that tenants aren’t required to move out when they reach a certain income level, but the rent formula is always set at a particular proportion - often a third - of household income, whatever that income happens to be. It means that tenants on low incomes can afford the rent, and that if their incomes increase slightly they pay slightly more rent but still see the benefit of having increased their incomes; it also means that tenants who hugely increase their incomes find themselves paying a rent equal to or more than that of the private market - which can act as an incentive to move and give up public housing for somebody who needs it more.

I think that’s a feasible alternative to a fixed point at which somebody is forced to move out of social housing.

The issue with that is it acts as a massive disincentive to do anything to increase earnings - I spent a long time earning just £20 a week more than the Housing Benefit level, for example.

If I knew that the day I was offered a new job paying £30 a week more, I'd be given notice of eviction despite not having any job security for at least two years, it would have been madness to take it and then have to move (possibly too far away to be able to continue in the job), pay hundreds in moving costs and furnishing, pay out increased travel costs and then potentially have the job end with a week's notice shortly afterwards, rendering us all homeless. In addition, I need accessible housing - you don't get that from a standard rental.

I’m probably selling my two rental properties this year. Our tenants cannot afford the rent rises we need to cover the post-Truss mortgage rates and the skyrocketing service charges.

It’s currently costing me and DH £1200 per month to let them live there on rents they can afford. Out of our own PAYE income. We tried because they are good tenants and one family is a single mum. But we can’t carry on subsiding them anymore. we will also have to pay 50% tax on the rental income so when the tax bill comes in being a landlord will probably end up costing us upwards of £20-25k this year (because there’s no money in the rental income to actually set aside for tax).

I would be delighted to sell to the government for them to use as social housing.

Landlords are not ogres but if there is no money in being a landlord then more of us will sell up and the housing shortage will become more severe.

Rents are not set in isolation from mortgages. When mortgages go up rents will follow.

There has to be a cap otherwise rents will soar.
What we need is more social housing, scrap right to buy, more house building and encourage more mobility in the property market.

I think the rates should be raised so a 2 bed rate covers the average 2 bed house and a 3 bed rate covers the average 3 bed house.
I don’t think the cap should be removed - I also think home owners should think about whether the really need the size house they are occupying. Our house has three bedrooms and four of us live here - we could afford to buy a five bedroom house but we don’t need one. Maybe if people stopped buying 4 and 5 bed new builds for three or four people to live in then the house builders would build more smaller houses or maisonette on the same plots and go some way to solving the supply issue.

Too much demand on rentals to ever lower prices.
But seriously lower prices would benefit the whole country.. imagine having another five hundred quid a month to fritter away or save. The economy would boom.

It’s a horrible system.

And you can’t rent anywhere smaller so the LHA covers the rent, no landlord or agent can rent to you when they find out you’d be over crowded.

People also don’t realise how hard it is to get anyone to rent to you when you claim benefits.

It’s also important to point out that there was a cap on housing benefit before the Local Housing Allowance (LHA) cap we have now. The difference is that it was much higher and aligned more closely with market rents.

This was a real problem with the rental market until the LHA criteria were changed to be as they are now. Landlords knew the maximum the council would pay, which was fixed around market levels, and simply set their rents to fit that cap. As market rents increased, so did LHA, as it was calculated around them - but salaries didn’t. It resulted in the opposite situation to what we have now: people on benefits found it easier to find homes as they didn’t have to worry about the cost, whilst people on average incomes who had to pay their own rent couldn’t afford the same rents as people receiving LHA and struggled. That’s largely why LHA quartiles were changed.

Oh yes, sorry I worded that badly. I know we could have rented whatever size house we wanted. But we couldn't have claimed HB to cover that huge house.

At one time there was some weird rule that if your actually rent was £x less than the HB rate then you could keep that extra £x.

Under LHA rules I'm technically 'entitled' to 3 bedrooms, but the 3 bedroom rate won't cover a 3 bedroom house here. And the benefit cap means I wouldn't actually get the extra LHA anyway.

It is a complex issue.

There used to be a cap system with registered rents, it was got rid of ages ago, I think under the Thatcher govt., under the belief that the market would set the level.
One of the problems, that resulted in the current benefits cap, was that landlords started to take advantage of Housing Benefit system and rents soared, pricing out those not on HB.

The system is flawed but any changes need to be made with an understanding of unintended effects.

Everyone should be able to have a decent and safe home.

You could have rented any size house you liked as long as you could top up the rent.

The LHA is assesed on family size and need and you are given HB in a sliding scale to that in proportion to your wage. They don’t give a shit about how many bedrooms. I had to get in debt in the end paying for a 3 bed place as I couldn’t find a landlord of a two bed property to rent to a scumbag like me claiming top up housing benefit.

They need to assess people who currently live in council/ social housing and force the ones that can afford it into private rent. I know a few people with household incomes of over 100k a year but they still live in the council house they have had for years.

I think there has to be a limit of some kind, the problem is that the cap is so low that it doesn't cover rent at all in a lot odd places.

There's also an issue with the actual benefit cap as well. I'm very "lucky" in that my rent is under the LHA, so it's all covered. But if my landlord were to put my rent up, I wouldn't actually get the increase because of the benefits cap. (Before anyone asks why I don't work, I'm assessed as LCW, which means I'm too ill to work, but not ill enough to get any extra money/remove the cap)

I'm trying to remember how the old housing benefit system worked when I left home 20 years ago and we needed top ups as a young family. I'm sure there were rules about how many bedrooms we could claim for, so we couldn't have rented a 5 bedroom place when we only needed 2.

I would have a combination of much more social housing being built of all sizes and houses as well as flats but also rent caps in place on private rentals, appropriate to size and area and based on 'actual' rents rather than some fantasy figure they seem to allocate - however UC allowance could be up to the rent cap level -

The LHA rate is a joke anyway.

When I lived in London 5 years ago, the LHA was 1,200pm for a two bed property. There wasn’t a single two bed up for rent in the borough for less than 1,500pm.

And it’s not easy renting when you claim housing benefit (or UC as it’s under now). Estate agents laugh you out the door and most landlords won’t accept it, even if you are working full time and it’s a top up benefit as it was with me.

The amount of times I was told on here to rent a one bedroom, sleep on the sofa and put the children in one room. No one will rent to you like that!