New figures reveal families claiming enough housing benefit to fund a £1m mortgage
The Department of Work and Pensions has released a report which reveals that at least 100 families in the UK are receiving enough in housing benefit to find a mortgage on a £1m property each. More than 30 of these families receives £1,500 per week in housing benefit, which works out to more than £6,000 per month - enough to fund a £1m mortgage. Another 60 families are receiving £5,000 in benefits each month, renting properties in some of the most desirable and expensive locations in London.
This will come as a shock to the four out of five housing benefit claimants who are currently receiving less than £100 per week to go towards their rent payments. Most people on housing benefit are receiving other benefits because of unemployment or illness, making housing benefit one of the most important to help people survive during difficult times. In many cases the benefits received do not touch their full rent payments, still leaving many families struggling to keep a roof over their heads.
Last year the Government announced plans to cap housing benefit payments at £400 per week, planning to move families living in higher value properties into smaller and cheaper properties to allow the benefit to cover their rent payments. However, somehow 5,000 + claimants are still receiving over the benefit cap amount, to the degree outlines above.
Commentators have criticised the DWP for not bringing in the cap sooner, or ensuring that people living in these extraordinarily priced homes be moved out or have their benefit brought down. While many people struggle to get mortgages or pay off rents in much cheaper homes (especially those looking for bad credit or contractor mortgages), many ask why people claiming benefits should be allowed to live in places that taxpayers could not afford.
But the DWP should not be concerned as the cap comes into place for all benefit claimants over the year and those renting exorbitantly priced homes in areas such as Chelsea or Kensington should be prepared to find cheaper accommodation in less high profile areas, or start to look at other options such as shared ownership schemes or even the Government’s right to buy scheme which allows council tenants to buy their property for a reduced price and more reasonable rate.
Article by: Andy McBride, Associate Director at Contractor Mortgages Made Easy
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