Cuts to housing support


Private tenants


The housing charity Shelter says that in addition to long waits for the first payment of UC, the housing cost element of UC is no longer enough to prevent families from becoming homeless. Just as under Housing Benefit (see Chapter 7), the housing cost element is capped by Local Housing Allowance (LHA) rates, which are frozen until 2020. These rates, says Shelter, no longer reflect the true price of market rents. It reports that for nearly one in four (24%) of its clients, the housing element of their UC payment was not enough to cover their rent. It estimates that if the LHA freeze is not lifted until 2020, one million households could be at risk of homelessness.


Social housing tenants


In October 2017, a Smith Institute report, Safe as houses, examined the impact of UC on tenants in the London boroughs of Southwark and Croydon. Southwark Council, one of the first boroughs nationally to see the full roll-out of the new system, said that “warning bells have already been ringing loud and clear” and that actual rent accounts show real evidence of the cycle of borrowing and debt. 


The two London boroughs manage almost 50,000 council homes and both councils have raised concerns about the number of tenants claiming UC falling into significant rent arrears.


Southwark submitted evidence to Parliament showing that the average council rent account in Southwark sits at £8 in credit, but for UC recipients, it is £1,178 in arrears. The council reported a £5.8 million debt from arrears for those on UC — representing 12% of residents.


A local foodbank reported a 94% increase in the numbers of referrals between the first quarter of 2016 and the first quarter of 2017, and an even bigger increase among families with children (179%).


The council’s own local welfare fund (Southwark Emergency Support Scheme — SESS) also reported a big increase (34%) in the numbers of food parcels issued in the first quarter of 2017 compared with same quarter in 2016. More than one in 10 in need of emergency help cited delays in receiving UC payment.


Owner occupiers


In-work households can no longer claim help with paying their mortgage. There is now a “zero-earnings” rule for claiming Support for Mortgage Interest (SMI), which changes from a benefit to a loan on 6 April 2018. If a claimant and/or their partner has any earned income, payment for owner-occupier housing costs stops.