Impact of the changes to Housing Benefit announced in the June 2010 Budget

Written evidence submitted by Camden Federation of Private Tenants

Executive Summary

1. Background

Most people would agree that strong communities are stable and sustainable communities - where a wide variety of people live together, and individual members of it engage with each other and contribute in varying degrees to the life of the community.

However, one of the widely acknowledged problems faced by the private rented sector (PRS) is that of transience or "churn" as it if often called – where large numbers of private tenants are forever on the move and never get the opportunity for the roof over their head to become a home.

Given that the PRS has increased by 40% across London since 2001 and is set to grow even more; this is a situation that will only get worse in the coming years.

Also, in a borough like Camden, where private tenants make up a quarter of households (2001 Census) this is a particularly acute problem.

2. Gathering the Evidence

However, we wanted to look at the impact short-term housing has on individual tenants in more detail, so in 2004, we carried out a small research project "Security of tenure and community engagement – a comparative study".

We found that private tenants were less likely to:

· Vote

· Know who their councillors and MP are

· Know or speak to their neighbours

Also, they were less likely to:

· Register at a doctor or dentist

· Know about council services and community organisations

· Read a local paper

We believe that the existing problem of transience, coupled with the new government's proposals to cap Local Housing Allowance rates, which could result in large numbers of private tenants having to re-locate from central London to other parts of the city, or even out of it altogether - will have a further devastating impact on community cohesion in the capital.

From figures provided by Camden Council, it will not only be 814 families who may have to move from their current home, but 163 elderly people and 121 disabled people.

However, on the basis of our findings above, not only will there be an increasingly negative impact on the health of neighbourhoods, but on the health of individuals and the health of democracy as well.

3. Older Private Tenants

Many of our members, who are older private tenants living in central London, tell us:

· When they first started living in these areas 20, 30 or even 40 years ago – they were not the expensive, exclusive and upmarket locations they are now. In fact, the very reason people moved to places like Westminster and Kensington and Chelsea was because of the cheap rents available in certain parts of the boroughs – not the central location.

· Why should people who have made their contribution to society be fearful of the future, a future that is now full of anxiety, insecurity and uncertainty through no fault of their own ?

4. The Impact on Rent Levels

The government has stated that through placing a cap on LHA rates it believes there will be a downward pressure on rent levels:

· We are very sceptical that large numbers of tenants on short-term Assured Shorthold tenancies will suddenly start negotiating a lower rent with their landlords – and for those brave enough to try, we suspect the answer will be – if you don't like it and/or you can't afford to pay it you can go somewhere else – as is often the case in perennially popular renting areas like Camden. Also, for landlords who are late entries to the rental market and who have bought properties at high prices, will they be willing to reduce rents if their margins are tight ?

· If sufficiently large numbers of tenants do end up moving to other boroughs or out of the city, our experience of working in a high demand area tells us that landlords in these cheaper areas will quickly see there is a rise in demand for properties, and start to put their rents up.

5. The Impact on Housing Standards

The private rented sector already has the highest proportion of non-decent homes.

Again, from our many years of representing older Regulated tenants whose rents are controlled – we see a direct correlation between the income the landlords receive from rents they receive, what rent they think they should be getting for a particular property (due to its size, location etc) and consequently what they are willing to spend on maintaining it.

If rents are reduced as a result of the LHA rates cap, we would be very concerned:

· That property standards would become even lower at the bottom end of the market, due to landlords reluctance to properly maintain properties.

· That there would be extra demand on already hard-pressed environmental health teams with responsibility for policing the private rented sector.

· That the hazards in properties (as identified by the Housing Health and Safety Rating System) that can damage the health and safety of the occupants could increase.

6 September 2010