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News - 6 January 2012

Benefits change prompts affordable house shortage fear

The Chartered Institute of Housing believes that 800,000 homes will become too expensive as a result of changes to benefits which take effect this week, resulting in a shortage of housing for families on a low income.

The new limits will restrict the maximum amount of housing benefit payable weekly to £250 for a one-bedroom property, £290 for two bedrooms, £340 for three bedrooms and £400 for four bedrooms. The benefit changes are being introduced gradually since they will affect tenants - as the anniversary of their claim comes up.

Ministers say the new limits on how much housing benefit can be claimed will stop rents spiralling.

Housing benefits cost taxpayers £20bn a year.

The Chartered Institute of Housing said there are likely to be thousands more claimants than properties that are affordable solely on money claimed using local housing allowance, which is the benefit paid to tenants of private landlords.

The professional body for housing fears low income families will be left with the choice of reducing spending on food to pay their rent or moving out, but, in some regions of the UK, it was unlikely that poor people would be able to move to cheaper locations because there would be more claimants in areas with low-cost homes.

But the Department for Work and Pensions said that even under the new measures it would be paying claimants up to £20,000 a year in Housing Benefit - so there is no reason why anyone should be left without a home.

"Early indications are that people are not moving out of cities in their droves to cheaper rural areas. For the vast majority of areas, except the most expensive parts of inner and central London, at least 30% of all private rental properties will be affordable.”

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