Housing Benefit reductions come into force in New Year, warns Hackney CAB

'Sardines' off Cambridge Heath Road. Photograph: Claude Crommelin

There are some major Housing Benefits cuts coming into force on 1 January 2012.

If you are single, under the age of 35 (with no dependent children) and rent from a private landlord, your Housing Benefit is only likely to cover the cost of renting a single room in a shared house. This is known as the shared accommodation rate. Previously this restriction only applied to those under 25.

If you are in this age group and rent self-contained accommodation from a private landlord, your benefit is unlikely to cover the full rent. There are a few exceptions, and there are some transitional arrangements which mean that pre-existing claimants may have a little more time before the change happens.

Hackney Citizens Advice Bureau (CAB) is concerned that private tenants may be pushed into joint sharing arrangements with friends and sometimes strangers. Many of these groups of house sharers will be offered joint tenancies.

Hackney CAB is warning people to think very carefully and get advice before signing up to a joint tenancy agreement.

“People do not always realise that each tenant is legally liable for the whole of the rent and the landlord could choose to pursue any of them for the whole amount” says Michael Foley, an adviser at Hackney CAB.

“This means that if the other joint tenant/s do not pay, you could be held responsible for thousands of pounds of debt through no fault of your own.

“If you asked someone if they would act as a guarantor of a credit agreement for £12,000 for a group of complete strangers, most people would never even consider it. However someone who is entering into a joint tenancy is putting themselves under a similar sort of risk.”

The CAB saw a client from E5 who had been renting a home with another couple on a joint tenancy. One of the tenants lost his job but was not able to claim housing benefit. He disappeared, not leaving an address, and the client was left with rent arrears of around £6,000 not of his own making.

They have also seen a client from Hackney who received a council tax bill for the previous four years which had been unpaid by a joint tenant. She was legally liable to pay, even though she had already paid her own portion.

Other problems with joint tenancies seen by the CAB include problems paying for utilities and situations where one person wishes to move out and the others do not, or vice versa.

The CAB is urging people to get advice before signing tenancy agreements; once the agreement is signed it is usually legally binding.

If you are moving to shared accommodation and want to ensure you stay in control of your finances, it may be best, if possible, for each resident to try and get a sole tenancy instead.

If you wish to seek advice on housing you may come to Hackney CAB at 236-238 Mare Street E8 1HE or telephone Shelter London on 0344 515 1540.