An article in Inside Housing today looks at a study by the consumer magazine Which that says: -
“11 per cent of mortgage holders would be unable to meet repayments if hit with a £100 rise, and 20 per cent would struggle to buy essential items including food. The study was released yesterday (1 May) to coincide with a rate increase from a number of leading banks”
Be prepared to read man articles on this as you leisurely read the Sunday newspapers this weekend which will no doubt focus on the impact this will have on hard-working and aspirational British people and whether (a) the banks and other lenders need to do this or (b) they are a shower of money-grabbing b******s, depending on which Sunday paper you read.
If you are lucky you may see some go a bit further, scratch the surface if you will, and link this in with homelessness some may even like to link it with the Newham to Stoke exporting homelessness issue from last week. Indeed the article has an immediate, correct and contextual response from Campbell Robb at Shelter “‘Even a small increase could be enough to tip some people into a spiral of debt that can lead to repossession and ultimately homelessness.”
Eleven per cent or 1 in 9 mortgage payers would be at risk of losing their home if they had to pay £100 per month more so say Which.
Just £23 per week extra cost would create significant upheaval and distress.
This puts the ‘bedroom tax’ into context doesn’t it with the higher than this losses there planned by this government with average figures of £25pw (£108pcm) being quoted and accepted as likely.
Yet of course the coalition says talk of homelessness from the bedroom tax is scaremongering from the left leaning lazy consensus that is the social housing sector!
These examples however pale into insignificance when we look at the shared accommodation rate or SAR as the House of Commons briefing paper (SN05889) from October 2011 tells us the comments of Citizens Advice:-
“Shortfalls have always been particularly common for this group – DWP commissioned research published in 2005 found that 87% of all SAR claimants faced a shortfall, averaging £35.14 per week”
So 7 years ago the average shortfall for single people under 25 was £152.16 per calendar month, more than 50% higher than could happen with mortgage payers today. If 20% of mortgage payers would struggle to buy essentials such as food in 2012 with a £100 per month less money imagine what struggle and poverty and risk of homelessness £150 per month less month less money was like 7 years ago!
This government, who has repeatedly stated since 2010 that their HB reforms won’t cause increased homelessness and such comments are mere scaremongering expanded the SAR to include all those aged under 35. Their impact assessment on the SAR however stated:- “Nationally, around 7% of the LHA caseload, or 20% of the 1-bedroom LHA caseload, would receive, on average, £41 per week less benefit than under the current rules. Using estimates of the March 2010 LHA caseload, this represents 63,000 people losing out. Of these, the majority would be single males; and/or not in employment; and/or on income-based Jobseeker’s Allowance.”
£41 per week is £177.53 per calendar month less money and compared to the £100 per calendar month for mortgage payers is a stark comparison.
A DWP paper on the SAR issued 20 April 2011 said the average shortfall in urban areas would be £57 per week (£246.81 per calendar month). This also said in Central London the 1 bed rate is £250pw but the SAR is £137.50 per week, a loss for 25-34 year olds of £112.50 per week or £487.13 per calendar month! Even worse is inner North London with rates of £245pw reducing to £103.89 – a loss of £141.11 per week or a staggering £611.00 per calendar month and six times more than the ‘aspirational’ mortgage payers so beloved by this government!
So when this weekend you read the Sunday papers which will no doubt have articles on the impact on repossessions (and homelessness) a possible £100pcm increase will have for mortgage payers, remember the context on what impact it will have on those in rented housing whether social or private rented. Imagine being 25 years of age, single, having worked since you left school and suddenly finding yourself unemployed and living in a 1 bed flat.
Next time you hear this government say their HB reforms wont impact upon and increase homelessness and ‘stories’ to that effect are ‘scaremongering’…..
Finally, it was also stated in the same House of Commons report (SN05889) on the SAR changes that
“95% of front-line housing professionals expressed concerns about the proposed change, including that it will cause increased homelessness, higher costs for local authorities and increase hardship and destitution.”
I raise this because yesterday the DWP release a transcript of a speech given by Lord Freud on welfare reform – the same Lord Freud who argued the government’s case for the SAR, the 30th percentile drop and all other HB reforms. The same Lord Freud who said it was normal and typical for many under 35s to live in share accommodation no less. In this speech he says “…I am glad to have broad support for Universal Credit from social housing providers.” This is an incredulous claim unrivalled in any political speech by any politician I have ever read. Imagine any politician taking a lie detector test with a flat line representing fact and peaks revealing a mistruth and or lie, this claim would blow up the polygraph given the spike it would cause!
SAR like all HB reforms – paying HB direct to tenants not social landlords, the bedroom tax and others that the social housing sector are unanimous in their scorn for the adverse impacts they will have – will feed into Universal Credit. Yet Lord Freud says he has broad support from the sector despite all this and despite “95% of front-line housing professionals” saying it will “…cause increased homelessness, higher costs for local authorities and increase hardship and destitution.”
That 95% against these plans was before we say the first impact of the HB reforms with the reality of London boroughs attempts to export their homelessness and before the full impact of these HB reforms comes in.
I see Lord Freud defines ‘broad support’ in the same way 99% of the population defines universally condemned…or perhaps the same way Shapps defines ‘affordable’ or “1 for 1 replacement!”
Apologies the correct link to the Lord Freud speech this week is here - I read this open mouthed at the sheer nerve of Lord Freud in what he said. The claims he makes in it beggar belief and the whole speech is incredulous.