6. Help with housing costs


The previous Conservative-led coalition government focused particularly on Housing Benefit as a means of cutting public spending. 


The Housing Benefit bill has increased massively over recent years, but unions point out that this is as a result of the Right-to-Buy policy, introduced in the 1980’s under the Thatcher regime, reinvigorated under the coalition government, and the failure by successive governments to build enough affordable housing.


The coalition capped Housing Benefit at a fixed level based on property size; raised the age for those entitled only to the single room rate from 25 to 35; reduced the calculation that is used to work out the rate of Local Housing Allowance (see page 85); capped total benefits and introduced the “bedroom tax” or spare room subsidy (see below and page 83).


After winning a majority in the May 2015 election, the Conservative government moved quickly to build on these measures by announcing its intention to reduce the Benefit Cap from £26,000 a year to £23,000 in London and £20,000 outside London, and freeze Local Housing Allowance until 2020. The four-year freeze in housing benefits comes despite the continued spike in private rent prices, with some areas of the country seeing an average annual increase of up to eight per cent. 


In addition, the removal of the “Family Premium” from Housing Benefit will lead to further reductions in housing benefits for working families by a total of up to £17.45 per week from May 2016. The Bill also sets out changes to Support for Mortgage, including the change from a grant to a loan from April 2018 onwards. 


The government has also announced that housing benefit entitlement will be removed for young people aged 18-21 from 2017 in an effort to save £40 million by 2020-21. Local councils were responsible for paying Housing Benefit, but this is gradually being abolished and will be paid instead as part of Universal Credit (UC). UC began in October 2013 for some new claims but is now massively behind schedule (see Chapter 1). (If you are getting Housing Benefit while you are waiting for your benefits to be transferred to UC, you can choose whether to appeal against a Housing Benefit decision or ask for it to be looked at again. However, once your benefits are transferred to UC, you will be covered by new appeal rules).