A “perfect storm” of benefit cuts and a lack of new homes will lead to a rise in homelessness and crime in Merton, charities have warned.

From January 2012, single people aged between 25 and 35 in Merton could suffer a weekly drop of up to £90 a week in benefits.

The problem is compounded by Merton landlords not cutting their rents by as much as other boroughs, according to Annys Darkwa, managing director of St Helier-based Vision Housing.

Ms Darkwa, whose organisation finds homes for ex-offenders, said: “The benefit given for private rented accommodation is only £75 to £85 a week, but in Merton we’re finding that only leaves many people with £20 a week left to live on.

“For many of our clients who are ex-offenders it has become a perfect storm where there are fewer jobs and less support available.

"If this leads people to return to committing crime. That is a disaster.”

Nick Blair, a 25-year-old ex-alcoholic from Mitcham, said it took more than a year for the job centre to get him a job earning £7 an hour at Asda, after he spent long periods sleeping rough from the age of 17.

Mr Blair said: “I barely survive from the money I earn, but I can’t go back on benefits either because the changes to shared accommodation would makes things almost impossible.

“When I was on the street I thought about killing myself, but when I was settled in a home I thought there was some hope. Now I don’t know what’s going to happen.”

The housing benefit cuts coincide with cuts in grant to social housing providers for managing existing properties and for building affordable housing for key workers and people considered to be vulnerable.

Merton Priory Homes, which manages 6,000 properties in Merton, this week announced it was putting up rents for new tenants by as much as 59 per cent from April.

It has made a bid to the Homes and Communities Agency to build 30 new homes by April 2015 – with 21 of these to be rented accommodation and the other nine to be used as shared ownership.

It said the rent rise would pay for the new homes.

Councillor Martin Whelton (Labour), cabinet member for communities, said: “The increase in rents and reductions in benefits the Tories have brought in will mean that the small number of homes that are built won’t actually be affordable at all.

“This so-called strategy, combined with rent increases, is a recipe for increasing homelessness, which will cost council budgets more in expensive temporary accommodation, and tenants are being made to make up for the shortfall in housing spending.”

The Government’s welfare secretary, Iain Duncan Smith, has attacked what he called “scare stories” about homelessness being increased by his changes, and pointed to £190m being given to councils over four years to smooth the transition.

He said in June: “Instead of complaining, responsible councils should be working to effectively implement these policies, and recognise that we are trying to get people off benefits and into work, and drive the cost of the benefits bill to taxpayers down.”

This week the Government announced a £400m fund to kick-start the private housing market, which it claimed would lead to 16,000 new homes.

It said last year Britain’s house-building rate fell to its lowest peace time level since the 1920s.


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