To address the capitals current and predicted housing problems the Institute for Public Policy Research is calling on the newly re-elected Mayor of London to make housing a priority.
Due to the impact of high rents in the capital, brought about by the new welfare reforms, the think tank is calling for the local housing allowance cap in London to be raised by £10 (in the short term) and in the long term wants to see power and responsibility for housing benefit devolved to the mayor of London.
In an IPPR report, Affordable capital?, they argue for a range of radical measures after predicting that current policies would see London face a housing deficit of 325,000 homes by 2025.
‘London is facing a housing crisis exacerbated by the rest of the UK’s reluctance to fund housing benefit costs in the capital,’ said Andy Hull, a senior research fellow at the IPPR.
‘Families who find themselves living with a shortfall in their rent as a result of benefit changes are likely to struggle to find affordable alternatives because of the shortage and high cost of housing in London.
‘The mayor should be able to determine how housing benefit is allocated across London and set the relevant limits in line with prevailing market and economic conditions. This would enable the mayor to adjust the current caps and remove the worst iniquities which he spoke out against during his campaign.’
It says the role housing associations can play in tackling housing shortages should be explored in more depth, including the option of them building more homes for market rent, and also calls for public land to be released for development.
It goes onto say that regulation of the private rented sector should be explored, including setting maximum base rents within the LHA market, and setting up an accreditation scheme for private landlords, and a ‘rent stabilisation board’ to check for ‘unreasonable rent rises’.
The think tank also calls for and the imposition of a ‘piggy bank tax’ on foreign buyers of properties worth more than £2 million.
In a separate report examining the housing market in Bradford, the think tank has also called for the localism agenda to be applied to welfare reform by removing housing benefit from the universal credit when it comes into force next year.
This is because they believe that allowing local authorities to set housing benefit rates would give them a ‘powerful bargaining chip’ to equalise the private rented market.
At Landlord Referencing we have been continually campaigning against the Universal Credit bill, as we do not believe any part of Local Housing Allowance should be paid on a pay packet basis directly to the tenant. Therefore we whole heartedly agree and support the IPPR’s suggestions that housing benefit payments should be removed from the Universal Credit bill and responsibilities devolved to local authorities. Not only will they have a much better understanding of the financial situations of their community, it will also quell a multitude of problems that will inevitably be brought about if this bill is passed.
Since the Local Housing Allowance shared room rate was extended, to people aged under 35 (January 2012), our community have already noticed a massive increase in rent defaults, property damages and tenant migration.
In the first four months of this year alone, we have reported £791,897+ worth of accumulated rent defaults and property damages from our community of landlords and letting agents – on a national scale.
As a landlord OR tenant, are you in favour of the Universal Credit Bill?
Or are your against it? Either way; let us know why!
What do you think about the private rented sector being regulated?
Do you agree that Local Housing Allowance responsibilities should be devolved to local authorities?
Or do you have any other ideas of how LHA should be handled? Either way, let us know!