Benefits cap will lead to homelessness, RLA warns

The Residential Landlords Association has warned that 1% caps to rises in benefits will lead to an increase in homelessness.

It pointed out that according to the Government’s own Valuation Office Agency, the average rent in England for the 12 months to September 2012 was 1.29% higher than in the preceding 12 months.

Alan Ward, chair of the RLA, said: “Almost a quarter of tenants in the private rented sector are in receipt of housing benefits, including some who are in work.

“While landlords have kept rent increases well below inflation, this still wouldn’t be sufficient for benefit claimants facing a 1% cap on the increase in their benefits.

“Already before this measure is introduced, Shelter has reported that 1.4 million people are falling behind with payments on their rents or mortgages. The Government’s reforms will serve only to increase the number of families struggling to cope.”

MPs voted through the Welfare Benefits Uprating Bill by 328 to 262 votes.

The legislation, which now goes to the House of Lords, will mean Local Housing Allowance base rates will be capped at 1% – less than the rate of inflation – for two years from April 2014.

An impact assessment published shortly before the debate confirmed that capping benefit rises will save around £3bn.