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Now even the poor can’t afford to live in London’s East End, says Shelter

PUBLISHED: 13:03 08 November 2010 | UPDATED: 15:04 08 November 2010

Priced out ... council housing may soon be only place those on benefit could afford

Priced out ... council housing may soon be only place those on benefit could afford

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ANYONE on housing benefit living in private rented homes will no longer be able to afford to live in London’s poverty-ridden East End within the next six years, a national housing charity warns.

Tower Hamlets—with poverty far higher than the national average—is one of five inner London boroughs that will no longer be ‘affordable’ to claimants on housing allowance by 2016, claims Shelter.

Government spending cuts put Tower Hamlets on the ‘exodus’ list with Islington, Camden, Kensington & Chelsea and Westminster, which will all have London’s highest ratios of unaffordable property.

Rents in three-quarters of the neighbourhoods across London would be out-of-reach for families on local housing benefit which is no longer to be tied to retail consumer prices, according to independent research by Cambridge University for the charity.

“Tens-of-thousands of households will be priced out of their homes and communities,” said Shlelter’s chief executive Campbell Robb.

“This will create concentrations of poverty across London, adding to the significant homeless crisis and overcrowding.”

“In just five years, huge swathes of London will become unaffordable. Cuts on this scale are going to have a devastating economic and social impact on London.”

The charity fears the Government’s proposals to cut the link to the Retail Price Index by 2013 will also “act as a disincentive to work” to those on housing allowances who have employment being forced to move away from their jobs.

The charity cites average London rent increases of 65 per cent between 1999 and 2008, while the Price index went up by just a 17 per cent.

Until now, housing benefit has kept pace. But that link is to be severed in three years’ time if the Government goes ahead with its proposal, Shelter points out.

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