3,300 face housing cash crisis

More than 3,300 families face eviction across Oldham because of deep cuts to housing benefit — unless their landlords agree to slash their rent.

Almost nine in every ten households in the borough claiming housing benefit in the private rented sector currently lives in a property that will be too expensive under new rules designed to save £1.8bn, official figures show.

In Oldham, some 3,390 families will be affected by the changes — 88 per cent of the total 3,850 claiming the benefit.

The clampdown will dramatically cut the maximum payments of local housing allowance claimed by tenants on housing benefit in private accommodation.

Instead of being capped at the “median rent” in the around 50 per cent of the highest rent charged — it will be tagged to the lowest 30 per cent of rents, from October.

It will mean the amount people will be able to claim for a one-bedroom property in Oldham will be £80.55 (down £5.75 on current levels), £97.81.

For two bedrooms (down £5.75) and £113.92 for a three bedroom property (down £8.05) and £143.84 for four bedrooms (down £11.50).

The detailed analysis by the Department for Work and Pensions revealed that across the country almost one million households will be affected.

The families face having to either fork out extra cash to make up the difference themselves, persuade their landlords to accept reduced rent, or leave to find a cheaper property.

The Government has insisted the shake-up is designed to force greedy private landlords to cut rents.

But the British Property Federation, which represents landlords, has saidmost simply could not afford a sudden dip in income — and would be forced to evict instead.

Liz Peace, the organisation’s chief executive, said: “Simply cutting allowances across the board will create ghettos if people suddenly have to move somewhere else.”

Last month, benefits minister Steve Webb, told MPs: “What we can’t do is go on simply signing over a blank cheque to private landlords.”