Sheltered housing will disappear from April 2018 due to the Tories LHA maxima policy – the same policy the Tories are said to be reconsidering because it will close DV refuges.
Below I explain this in as simple terms as possible and ask Where is the outcry over this?
The policy will evict the pensioner as sheltered housing will close as it becomes non-financially viable to operate and below is a table which proves this, as unlike politicians, numbers do not lie.
The source of the table is the choice-based lettings portal called Propertypool for Merseyside and the data was taken today for 1 bed sheltered housing properties. The figures hold good for the majority of the UK (London excepted)
As you can see there are 13 currently available 1 bed sheltered properties with their actual rent levels and the LHA maxima cap policy of the Tories says that those living in sheltered housing will only get a maximum of the 1 bed LHA rate which is £90.90 per week.
The average pensioner in Liverpool will have a £47 per week shortfall in their rent and have to find this £2,464 per year from their state pension or savings in order to meet the rent. They won’t be able to afford this and so sheltered housing will close in the simplest terms.
You may notice the inclsuion of Chung Hok (a BMR or black and minority ethnic organisation) and think their higher rent levels distort the overall average. So let’s look at the figures for neighbouring Sefton of 1 bed available now sheltered housing properties which has no such potential BMR distortion and we see the figures are very similar
The average Housing Benefit cut is £43 per week and £2,226 per year and of course that is also not affordable and sheltered housing will close.
A more detailed view (Merseyside)
As with most proposed Housing Benefit reform policies the finer detail is necessary to explain. Here this LHA maxima cap will:
- only apply to new sheltered tenancies from April 2017, and
- will only have the cut applied from April 2018.
Firstly note are that a new tenancy can be (i) a new tenant, (ii) a tenant who mutual exchanges and (ii) where one partner dies or moves into a care home resulting in a change from a joint tenancy to a new sole tenancy.
Secondly, a very comprehensive Older Persons Strategy document was released in 2015 to say that the churn or turnover rate in sheltered housing in Sefton is 16% per year. To simplify that means in a 100 bed sheltered scheme 16 new tenancies are created each year, and 32 in two years, 48 in three years and so on. By the end of this parliament in May 2020, 16 new tenancies will be created in 2017/18, 32 by end of 2018/19 and 48 by end of 2019/20. As such 48% of all sheltered tenancies will be new.
In monetary terms for the social landlord of a 100 bed sheltered property at the Sefton average of £2,226 per property this is a £106,848 cut in Housing Benefit and a £106,848 increase arrears risk and equates to a £1068 cut per property per year for ALL 100 properties.
Yet it will not get that far as the sheltered scheme becomes non financially sustainable well before this time and will have to close … or ONLY accept the pensioner as a tenant if they are NOT on Housing Benefit and a self-payer, which is impractical and will not happen as also too financially risky.
A more detailed view (Nationally)
In areas with high private rent levels such as London the 1 bed LHA rate can be as high as £260.64 per week which is more than enough to cover the cost of a 1 bed sheltered housing property there. However London and other perversely high LHA areas are the exception and not the rule. In much of the rest of the UK the 1 bed LHA rate will NOT cover the cost of the average 1 bed sheltered housing property.
Assuming that we do not move all sheltered housing to the capital and banish all pensioners there (!!) then the Merseyside details go for pretty much most of the UK and mean that most sheltered housing becomes non financially viable.
Taking money / benefit / welfare away from the pensioner is political suicide by any government yet the LHA maxima policy not only does that BUT the Tories have known these impacts since they received responses to their consultation paper on this shortly after July 2011. They – and its the same personnel at DWP in Lord Freud et al – have known about this for FIVE YEARS.
The Housing Benefit reforms of the Tories such as the LHA Maxima cap are dangerous and incredibly ill-conceived and ideological in the extreme and without a care for how they actually impact.
Where are the challenges to these incompetent policies is the question that needs answering by Labour and all other opposition parties, by social landlords and by lobby groups such as Age (Age Concern as was) along with the obvious question of What the f*ck were the Tories thinking when they came up with this in the first place and then re-proposed the LHA Maxima knowing the consequences for pensioners and other vulnerable and politically sensitive groups!?
PS There are a few more nuanced issues too such as the pensioner couple who have been in the 3 or 4 bed family home for decades and now reside there alone. When one partner dies or moves into registered care a new tenancy is created and if this is after April 2017 then from April 2018 the surviving member of that pensioner couple is hit by the LHA maxima cap.
They will only receive the 1 bed LHA rate of for example £80.55 per week in St Helens (another Merseyside council) yet their rent on the 3 or 4 bed could be £100 per week thus giving a £20 per week shortfall in their maximum Housing Benefit – in essence a bedroom tax for pensioners not in sheltered housing.
Also a number of sheltered housing properties are 2 bed flats with rent levels around £15 per week higher than those stated above yet the new tenancy will still only see the 1 bed LHA maxima rate apply and thus the weekly shortfall will be closer to £60 per week and over £3000 per year.
There are more nuances and detailed ones yet the simple overview above is suffice to get the basic issue across.