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The Impact of Recent Reforms to Local Housing Allowances: Summary of Key Findings

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The Impact of Recent Reforms to Local Housing Allowances: Summary of Key Findings The impact of recent reforms to Local Housing Allowances: Summary of key findings July 2014 Research Report No 874 A report of research carried out by the Centre for Regional Economic and Social Research, Sheffield Hallam University, the Blavatnik School of Government, University of Oxford, the Institute for Fiscal Studies and Ipsos-Mori on behalf of the Department for Work and Pensions © Crown copyright 2014. You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. This document/publication is also available on our website at: https://www.gov.uk/government/organisations/department-for-work-pensions/about/ research#research-publications If you would like to know more about DWP research, please email: [email protected] First published 2014. ISBN 978 1 910219 31 7 Views expressed in this report are not necessarily those of the Department for Work and Pensions or any other Government Department. The impact of recent reforms to Local Housing Allowances: Summary of key findings Contents Acknowledgements ................................................................................................................. 5 The Authors ............................................................................................................................. 6 List of abbreviations ................................................................................................................ 7 1 Introduction ........................................................................................................................ 8 2 The policy context ............................................................................................................ 10 3 The research programme ................................................................................................ 13 4 Housing Benefit caseloads, expenditure and entitlements .............................................. 16 4.1 Housing Benefit caseloads and the changing private rented sector ..................... 16 4.2 Trends in government expenditure on Housing Benefit ....................................... 17 4.3 The impact of the LHA measures on entitlements and rents ................................. 18 5 How has the Housing Benefit caseload changed in different areas since the LHA reforms? ............................................................................................................ 21 5.1 Changes in the Housing Benefit caseload by area type ....................................... 21 5.2 The dynamics of change: on-flows and off-flows .................................................. 22 5.3 LHA Dominant markets ........................................................................................ 23 6 How have tenants responded to the LHA changes? ....................................................... 25 6.1 Attribution and awareness of the LHA reforms ...................................................... 26 6.2 Reducing household expenditure and increasing borrowing ................................. 27 6.3 Reducing housing-related expenditure ................................................................. 28 6.4 Looking for work ................................................................................................... 28 6.5 Registering on social housing waiting lists ............................................................ 29 6.6 Rent payments and arrears .................................................................................. 30 6.7 The use of Discretionary Housing Payments ....................................................... 30 7 What has been the impact of the LHA reforms on residential mobility? .......................... 32 7.1 The lagged impacts of the LHA measures on residential mobility ........................ 33 7.2 Claimants’ experiences of moving ........................................................................ 33 7.3 Residential mobility and property choices ............................................................ 34 3 The impact of recent reforms to Local Housing Allowances: Summary of key findings 8 How have landlords responded to the LHA reforms? ...................................................... 36 8.1 Assessing the impacts of the measures on landlords ........................................... 37 8.2 Impact on lettings priorities .................................................................................... 37 8.3 Landlords’ attitudes to rent negotiation ................................................................. 38 8.4 Landlords’ responses to rent arrears .................................................................... 39 8.5 Impact on portfolios and yields ............................................................................ 40 9 What has been the impact of the LHA reforms in London? ............................................. 41 9.1 Potential impacts in London .................................................................................. 42 9.2 Changing HB caseloads within London ................................................................. 42 9.3 Impact on entitlements in London ......................................................................... 43 9.4 LHA rates and the wider PRS market in London .................................................. 44 9.5 The responses of landlords in London ................................................................. 45 9.6 Homelessness and recent trends in London ......................................................... 46 10 What has been the impact of the LHA reforms on those affected by the Shared Accommodation Rate changes? ......................................................................... 48 10.1 Impacts on single people between 25 and 34 years old ...................................... 48 10.2 Impacts on the caseload of the 25-34 Group ....................................................... 49 10.3 The Impact of SAR on entitlements, rents and property choices .......................... 50 10.4 Landlord response to SAR changes ..................................................................... 50 11 Conclusion ....................................................................................................................... 52 11.1 Financial impacts .................................................................................................. 52 11.2 Impacts on landlord and tenant behaviour ........................................................... 53 11.3 Regional and area impacts .................................................................................... 55 11.4 The impact of specific measures .......................................................................... 56 References ............................................................................................................................ 58 List of figures Figure 3.1 Policy and research timelines .......................................................................... 15 Figure 9.1 Trends in median and lower quartile private market rents and LHA rates: London Centre ......................................................................... 44 Figure 9.2 End of assured shorthold tenancy given as a reason for homelessness: Q4 1996 – Q3 2013 .......................................................................................... 47 4 The impact of recent reforms to Local Housing Allowances: Summary of key findings Acknowledgements The research for this report has been funded by the Department for Work and Pensions, the Department for Communities and Local Government, the Scottish Government and the Welsh Government and we are most grateful for their support. We would like to thank all the tenants, landlords and housing advisers who gave up their time to take part in the surveys, the in-depth qualitative interviews and focus group discussions. We are very grateful to our colleagues at CRESR – Aimee Ambrose, Richard Crisp, Will Eadson, Mike Foden, Stephen Green, Elizabeth Sanderson and Ian Wilson for their contribution to the surveys and fieldwork with landlords and housing advisers. Stephen Green also provided very helpful additional research analysis as background to this summary. We would like to thank Ben Marshall, Ben Collins, Stephen Finlay, Josh Keith and especially Isabella Pereira at Ipsos Mori for the fieldwork and data preparation for the surveys and interviews with tenants. We would like to thank Sarah Ward of CRESR for her help in formatting the text and producing this summary report. This research programme has benefited considerably from very helpful comments and suggestions made by officials at the Department for Work and Pensions, the Department for Communities and Local Government, the Scottish Government and the Welsh Government. In particular we have received extremely constructive advice during the project from Andy Brittan, Claire Frew, Dan Heap, Toby Nutley, Vicky Petrie, Tracy Simpson and Rachel Tsang at the Department for Work and Pensions. Rachel and Claire were especially helpful in the latter stages of the programme. Edmund Kirby and Paul Osmon at the Department for Work and Pensions did sterling work in dealing with our many requests over the data necessary to
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