Housing Benefit Changes April 2011

In the emergency budget on 22 June 2010 the government announced significant changes to housing benefit (HB) and the local housing allowance (LHA).

These changes are being implemented to control and reduce the overall cost of housing benefit and will affect tenants in both the private and social sector.

From April 2011 the government is introducing a maximum amount or ‘cap’ on the housing benefit they will pay for each property size, these are:

• £250 for one-bed,
• £290 for two-bed,
• £340 for three-bed and
• £400 for four-bed and larger properties.

What this means for you

• If you currently live in Westminster's private rented sector and claim housing benefit it is very likely that you will be affected by these changes. If your rent is more than the amounts shown above, your benefit will be reduced to the amount shown.
  
  
• The changes will come into effect for new claimants from April 2011. For existing housing benefit claimants, the changes will start from January 2012 - applicants may have longer if the anniversary date of their claim (the date it is due for its annual review) is after this date. 
  
  
• Some of the largest shortfalls will be in larger size properties. For example the current rate for a 3 bedroom property in the Central London Broad Rental Market Area (which includes most of Westminster) is £700.00 per week. The new caps mean that a maximum of £340.00 will be paid by housing benefit.

• Westminster Benefit Service will be sending a letter to all affected claimants once the full details of the proposed changes are known. The relevant legislation has not yet been drafted by central government but once it has the Benefit Service will be contacting all those affected.
  
  
• Where there is going to be a shortfall between the rent you are charged and the cap level, you should try to negotiate a lower level of rent with your landlord. We may be able to help you with this. Please contact the Housing Options Service on 0207 641 1000 if you would like advice and assistance with this.
  
  
• If your landlord will not re-negotiate your rent, you should try to pay the shortfall from your savings or income. This will be more practical where the shortfall is small but where there is a large shortfall the best option in the longer term will be for you to find cheaper accommodation.
  
  
• In addition to the caps the government is also increasing deductions for non-dependents from April 2011. They will no longer be frozen at £7.40 for non-earners and will be linked to prices. Further details will be announced later in the year and tenants will be advised of any reduction in the benefit due to this change in writing from the Housing Benefit Service.
  
  
• If you do not make up the shortfall in your rent, take insufficient action to resolve the situation and are evicted for rent arrears, you could be considered intentionally homeless. You should do everything you can to avoid this, including contacting the Housing Options Service before it gets to this stage, so we can advise you how best to resolve things.
  
  
• For more information, see this FAQ on the changes

Finding cheaper accommodation

As noted above, the average rents currently charged in Westminster exceed the amounts payable under the new housing benefit caps. If your rent is more than these amounts, and you cannot negotiate with the landlord to reduce the rent or make up the shortfall yourself, once the caps come in you will need to consider moving to cheaper accommodation.

Generally, accommodation in central London areas like Westminster, Camden and Kensington & Chelsea is unaffordable; areas further away from the centre are more likely to have available accommodation that falls within the cap levels.

The Mayor of London's website has a very useful map that shows average private sector rents for different types of homes across London. A range of further information is also provided for tenants and landlords, such as how to find a private rented home.

This handy guide shows some examples of areas in London where the rent is currently within the housing benefit cap level. There are many other areas with average rents below the cap levels and you should not limit your search to these areas – this is intended to show examples only. 

Need more assistance?

If you need any advice or assistance on any of these matters, please contact:

Westminster Housing Benefits

Housing Options Service