Housing: Cap urged on rents as benefits cuts loom

SENIOR Liberal Democrats are lobbying for a cap on private sector rents amid fears that Government plans to cut housing benefit will hit vulnerable families.

Families stand to lose hundreds of pounds a month in benefit, forcing them to move home or even facing the threat of homelessness because of plans in the Budget to cut maximum levels of housing benefit.

Those in a four-bedroom house in York or Leeds will lose more than 1,700 according to research from the Chartered Institute of Housing, and the issue is threatening to be a major new tension within the coalition with Liberal Democrats actively lobbying for the Government to back down. Across the region 97,560 families stand to lose out by next April.

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With discontent still rumbling over the VAT increase, which Liberal Democrats argue hits the poorest hardest, some MPs are urging new powers to allow a cap to be imposed on rents private landlords can charge instead of simply limiting the amount of housing benefit which can be paid.

"I am sure there are ways to reduce the bill without in anyway being painful to the people in receipt of it," said one senior Liberal Democrat. "If you just reduce the bill you are going to find people doing absolutely nothing wrong who are going to have to move home, uproot their kids, on marginal incomes. It will cause real misery.

"Before 1989 the Government had the ability through local authorities to enforce fair rent through a cap. Anyone who charges rent above that will have broken the law. You save housing benefit money and the people who have paid the price are the landlords milking the system."

The concern stems from Chancellor George Osborne's Budget announcement that housing benefit payments are to be limited to 280 a week for a flat and 400 a week for a house.

He said it was needed because the cost of the payments had risen by 50 per cent over the past decade to 21bn.