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Despite cuts to housing benefit, claimants are remaining in London

Hannah Aldridge, Head of Analysis at New Policy Institute (authors of London's Poverty Profile and Movements of housing benefit claimants in London), examines the effect of cuts to housing benefits on London's claimant population.

There has been widespread concern that reforms to housing benefit are driving poorer people out of London, particularly from the most expensive areas. Now, 5 years on from those first changes to local housing allowance, we can look at whether welfare reforms have forced low income families to leave London. The evidence suggests that for the most part, they haven't.

The research, by the New Policy Institute and supported by Trust for London, explored the number of housing benefit claimants moving home and how this changed following the introduction of the major welfare reforms. It found that there was 89,000 moves of housing benefit claimants in 2014, much the same as in 2010 prior to the welfare changes. There was a slight increase in the number of claimants moving to outside of London, but this was relatively small. Overall most claimants continue to move within their locality - 60% of claimant moves in 2014 were within the same borough whilst only 10% (7,500) were to outside of London.

In Inner West London (e.g. Westminster, Camden, Kensington & Chelsea), where there was particular anxiety that housing benefit claimants would be forced to move, the number of moves actually fell between 2010 and 2014 (by 16%). Those who did move in 2014 were no more likely to move out of London than in 2010.

So how does this tally with reports that local authorities are increasingly placing homeless families outside of London? Part of the reason is scale, illustrated in the figure below. There are a large number of housing benefit claimants in London and only a fraction them move over a year. The number of households becoming homeless is much smaller, and the number of those placed outside London smaller still.

While the 1,300 homeless families placed out of London is small compared to the 835,000 housing benefit claimants in the capital, small does not mean insignificant. Becoming homeless is traumatic enough without being uprooted to an unfamiliar area. Welfare reforms have reduced the availability of suitable housing in London, making it much harder for councils to meet their homelessness duty locally.

This lack of housing suitable for benefit claimants could also explain why the total numbers of moves has slightly fallen. If the only viable alternative means moving far away, families may choose to remain in the same home despite the impact of housing benefit cuts on their income. Increasingly housing benefit claimants are working and this earned income could have helped them manage the loss in benefit. For others, they may be cutting back on other costs, or living in more overcrowded conditions. They may also have accessed Discretionary Housing Payments.

However families are managing welfare reforms, the data suggests that few are moving home and those that do rarely cover significant distances. Despite some high profile cases, it would be a mistake to think that London has been 'socially cleansed' and that no one living there is poor any more. London, particularly Inner London, still has some of the highest rates of poverty of the UK.

Find out more about housing and housing benefit in London.

Posted on 20 May 2016