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Forthcoming Social Cleansing in London

Anticipating the effect of the Coalition’s Local Housing Allowance reforms

The Government paid out £8bn in Housing Benefit in England in 2009/10, of which £1.5bn was spent in London. In an attempt to reduce this, a number of changes are being introduced to the Local Housing Allowance (LHA), which sets the maximum amount of rent that can be met from Housing Benefit. From 2011 LHA is being reduced from the median level of local rents to the 30th percentile and an absolute limit is being imposed on the allowance. From 2013, LHA will be increased in line with consumer price inflation (CPI) not with rents themselves. Cumulative CPI inflation between 1997/8 and 2007/8, for England, was 20%, compared with 70% for rents.

One way to anticipate the effects of these changes is to consider which neighbourhoods will be ‘largely unaffordable’ as the changes are rolled out: ‘largely unaffordable’ is defined here as when the LHA is lower than the cheapest 25% of neighbourhood rents. This means that someone seeking accommodation will find it hard to find a property that is available, affordable, in adequate condition and offered by a landlord who is willing to let to LHA claimants. Using this definition, the changes from 2011 will immediately reduce the proportion of London neighbourhoods affordable to LHA claimants from 75% to 51%. This falls further to 36% by 2016. Most inner London boroughs are likely to become almost entirely unaffordable to low-income tenants on LHA by 2016. See map below.

London neighbourhoods largely unaffordable to LHA claimants in 2010 and 2016

 In 2010.  Source: Fenton A. (2011)In 2010. Source: Fenton A. (2011)

 By 2016.    Source: Fenton A. (2011)By 2016. Source: Fenton A. (2011)

Moreover, the large clusters of neighbourhoods in outer East, South and West London that will remain affordable in 2016 are likely to house increasing numbers of low-income tenants as a result of the reforms. These areas are already characterised by high rates of multiple deprivation and unemployment among the existing population. Thus the reforms are likely to intensify the spatial concentration of disadvantage, and increase the segregation of poor and better-off households within London.

From: Poverty and Inequality in London: anticipating the effects of tax and benefit reforms, Ruth Lupton LSE
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