Boris Johnson, Simon Hughes and Karen Buck - allies against housing benefit cuts. Photo of Hughes by Keith Edkins

More than 425,000 Londoners could lose their homes if Government plans to cap Housing Benefit are pushed through un-amended, the National Housing Federation has warned.

The Federation described the reforms as ‘catastrophic,’ calculating that some 200,000 are at risk of being made homeless – the highest level since records began in 1980. Londoners will be particularly badly affected because the price of housing is far higher here than in the rest of the country.

Mayor of London Boris Johnson, Liberal Democrat deputy leader Simon Hughes, MP for Bermondsey and Old Southwark and Karen Buck, Labour MP for Westminster North, have all expressed their disquiet at the new measures.

The Housing Benefit cuts were announced in the last budget by George Osborne, who said: “We will for the first time introduce maximum limits on housing benefit – from £280 a week for a one-bedroom property to £400 a week for a four-bedroom or larger.”

The ‘red book’ in which the budget is described in greater detail puts the lower figure at £250 per week which would mean that, even in the poorer parts of the East London Line boroughs, there are few self-contained flats (suitable for parents with one child) available to claimants – and the shortage of bigger properties is even greater (see our feature).

In Hackney, four bedroom houses for rent are fairly abundant at £500 a week (there are very few available at lower rents) and under the current rules, that amount can be paid by Housing Benefit if the resident is sufficiently low-paid or unemployed. Under the new rules the resident would have to find an extra £100 a week in rent or move.

In Westminster, it is calculated that more than 5,000 families will have to find extra money because their rents exceed the new maximum weekly claim of £400. For those unemployed for more than a year there will be a further cut of 10 percent irrespective of the level of rent. Some families who have lived in an area for years, and who send there children to school there, will find themselves forced out of their homes if they cannot find the extra money.

“The housing benefit caps could see poorer people effectively forced out of wealthier areas, and ghettoised into poorer neighbourhoods,” Housing Federation chief executive David Orr said today.

“Some people affected by Housing Benefit caps may successfully find a home in cheaper areas, but many will end up in expensive bed and breakfast accommodation, while thousands will simply become homeless,” he continued.

The plans will impact particularly badly on the very low-paid who may end up losing their jobs because they can neither afford to pay the extra rent, nor pay the far higher travel costs associated with living on the outskirts of London. We may very well find that the low-paid workers who we rely upon to clean our city and care for our elderly will be priced out of the capital.

If you want your voice to be heard you can sign a petition organised by the magazine Inside Housing.