Benefit cuts lead to homeowner debt
13/09/2010The Citizens Advice Bureau has warned that proposed cuts to housing benefits will result in increased homeowner debt, rent arrears and homelessness.
The warning comes in evidence submitted to the Department of Work and Pensions (DWP), who will publish recommendations on the cuts later this year.
The charity said that a cap on housing benefit would create immense difficulty for householders, especially in central London where 93 per cent of private rents would be unaffordable to those on housing benefit.
The charity was particularly concerned that no proposals had been put forward to deal with the negative affects that were likely to result from the potential policy, such as trouble with home repayments.
Director of Atlantic Finanacial Management Kevin Still says, "The effects of the coalition government debt reduction programme will be wide ranging and for those that lose benefit entitlements or suffer an increased tax burden then they will see their disposable income hit.
With inflation rising above cost of living increases it creates the potential for serious debt problems for many.
Homeowners in particular may want to look at debt solutions if future interest rate rises are likely to create unmanageable debt problems.”
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