Thursday, 24 June 2010

The Budget 2010 by George Osborne (Will Lambeth face an influx of house hunters?)

I was going to write a post two days ago about the budget, and how it would affect folks in SE11.  And then I realised, it wouldn't, at least not in the way I had first envisaged.  The effects of certain changes are likely to be very subtle.

Obviously, we'll all be hit by the rise in VAT to 20%.  Although it's worth noting that the charity, Save the Children, say "Poor families currently spend more of their disposable income on VAT than richer families, with the poorest 10% spending 14% versus 5% for the richest." so we won't all be hit in the same way.  But in general, the cost of household goods will rise.

My real concern was related to social housing in Lambeth.  The Local Housing Allowance is due to be capped (from 2011) so that those who rent one bedroom properties can claim a maxiumum of £230 per week and those that rent four (or more) bedroom properties can claim a maximum of £400.  I wondered whether there'd by a mass exodus from Lambeth as single people and families could not afford to rent subsidised housing whilst claiming housing benefit.  I was going to write an article on how it would effectively push people out of Lambeth, but then I realised it probably wouldn't.

The scandal is that very few local authorities are able to build social housing to keep up with the demand.  Of course, that I describe it as a "scandal" is already to state a political view.  The question of social housing is one that will inevitably become more greatly politicised due to shortages, with many people asking why some families should receive council / housing authority subsidised housing, whilst others have to pay market rates.  But historically Lambeth has always had and built a huge amount of social housing.  It seems (I think) that the current problem relates to demand (ie. the council list currently stands at 20,000) and not the cost of housing.

A little research of the Lambeth properties on the council list (for those with enough points to be able to bid for them) reveals that even the larger properties in Brixton (4 beds) and Oval (5 beds) are only marketed by the council at £120.92 per week and £174.29 per week respectively.  Oval is in a more northern section of Lambeth (and I'm presuming that the northernmost properties will be more expensive than those elsewhere), so whilst I accept that the Guardian's Jenny Jones may be correct when she asserts "Lambeth families can get up to £430pw", I really do have to wonder whether they're not perhaps living in 9 bedroom houses somewhere.  I doubt there are that many of them in any case.  I also looked into one bedroom properties to see if the £230 cap would present a problem for local people, but even there, it seems it's possible to rent a 1 bedroom property in Lambeth, from the council, at between £90 per week and £137 per week.  Obviously, I might be missing something.  Perhaps the properties currently available are really cheap flats in a bad state of repair, but the website showed a geographical spread of 1 bedroom properties, so I doubt that that is genuinely the case. 

What I perhaps have not accounted for is the number of private landlords who let propeties at high rents whose tenants then claim their money back in housing benefit.  But many many landlords will not rent properties to housing benefit claimants (try telephoning a letting agent in Kennington and asking if they'll accept DSS) so I don't know how many landlords would fit into this bracket. In addition, the landlords who let through Lettings First (Lambeth Council's partnership with private landlords) are warned to expect significantly less rent than they'd receive on the private market.  But the question still stands.  Does private housing paid for by housing benefit represent a higher cost to the government than housing benefit to council tenants?  If so, by how much?  Mightn't there be a case for building more social housing in the first place?
The Guardian is suggesting that the government are trying to "export poverty" to the outer boroughs of London, but the political consequences of such a move are rather unknown.  It's alleged that Boris Johnson came to power as a result of voters in the outer boroughs being mobilised.  What would happen if traditional Labour supporters end up being cast out of inner London into the outer darkness of the outer boroughs (which are traditionally more blue)?  Nobody knows.

What is undoubtedly the case, and where I'm in greater agreement with the Guardian, is that there are other boroughs in London that do have people living in properties who likely claim housing benefit at above the new threshold limit.  (I'm guessing that there must be quite a number of such claimants in Westminster).  So the question arises about whether Lambeth won't in fact experience a mass exodus (the Guardian says people will be forced to outer and more eastern boroughs), but will experience something of an influx of house hunters?  I don't know how easy it is to swap a local authority property in one area (or move from a local authority housing waiting list) for a local authority property / housng waiting list in another area, but I'm sure we'll soon find out.


Mark Harrison said...

It will be people using housing benefit to pay for private rented accommodation who will be hit by this cap. They will have the options of finding additional money for rent themselves (unlikely, as they are claiming housing benefit in the first place), moving elsewhere, moving into a smaller (more overcrowded) flat, or being made homeless and presenting themselves to the Council to be housed in temporary accommdation. I fear the latter, which is financial madness as temporary accommodation is incredibly costly for Councils- effectively central government will be robbing Peter to pay Paul.

SE11 Lurker said...

Mark, I added the private tenant paragraph to the post when I realised that tenants are unlikely to be hit at current council rates. Is it possible to obtain this information in statistical form from Lambeth Council? How many tenants are renting privately and claiming HB? How many HB tenants are paying above the government's new threshold? That kind of thing. Think I'll try a FOE request.

Anonymous said...

We shall never agree on social housing, evidenced by past posts and this one. Our basic disagreement that everyone currently in social housing and on waiting lists meet the criteria is probably where it starts to fall down.

So I shall move to the Old Red Lion, which I have learned is open, but not finished. Thus the lack of marketing. They did this with The Tiger in Camberwell. They opened with construction still underway, so I would give it wide berth until they announce the real grand opening. Great building, hope it lives up to its potential.

Mark Harrison said...

I'm happy to request the information as a members' enquiry.

SE11 Lurker said...

Mark, a members enquiry would be fantastic.

Anonymous, I'm not entirely sure which anonymous you are (there are tonnes of you), so you're perhaps right about us not agreeing re. social housing. However, sometimes I think it's important to make certain points, even if you can't come to an agreement, rather than fudging issues in over enthusiastic tolerance along the basis that "we all agree, really, don't we?".

I would add that I doubt that many people living in social housing "meet the criteria", but I'm not really somebody that would look to evict people on the basis that they suddenly didn't fit the eligibility scheme any longer. More than anything else, I dread to think what that would do to settled and happy communities.

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