Housing benefit plans set to spark flood of HMO bids

Landlords are expected to cash in on new rules which will stop single people aged 25-34 without children from claiming Local Housing Allowance for a one-bedroom flat.

From April next year, people in this group will only be entitled to receive benefit at the rate for a room in accommodation with shared facilities. At current rates, that means a drop from £114.23 per week to just £65.77 per week.

Official figures show there are 1340 single people aged 25-34 in Edinburgh receiving Local Housing Allowance.

Edinburgh South Labour MP Ian Murray said the housing market in the Capital could not accommodate such huge, unexpected numbers of people having to move. He said: “There is just not the social housing or available HMOs to take the flow of people from these changes.

“But the question has to be, do local communities want more HMOs?”

Mr Murray said he had grave concerns that not only would the Government’s housing benefit reforms result in people currently living alone in one-bedroom flats having to move to shared accommodation, but also that a shortfall in the availability of multi-occupancy homes would force many of them onto the streets.

Mandatory licensing of HMOs was introduced in October 2000. A licence is required for every house or flat where three or more people live who are not related.

Ian Perry, who chaired a council working group on HMOs, said: “HMOs are driven by demand. Many landlords own a lot of flats and rent them out as HMOs as a business.

“They will see this as a business opportunity. If they thought there were 1300 more potential clients coming on the market that will create a demand and since it’s a very profitable business, that will lead to a greater number of HMO licences being sought.”

He said HMO regulation was about ensuring standards of accommodation, but did not control the market.

“Provided the premises meet the standards, there is no restriction on more flats coming on the market.”

The Department for Work and Pensions spokeswoman said: “Our Housing Benefit reforms are about restoring fairness to a system which has spiralled out of control and ensuring that benefit claimants make the same choices about affordability as everyone else. No-one needs to be homeless as a result of these reforms.”

She said people in the most vulnerable situation would be exempt and others could be considered for discretionary help.

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