Three pieces in today’s Guardian (here, here and here) capture some of the problems being created in the housing market by Coalition welfare reforms. Anyone who’s been watching the London housing market could hardly be surprised. Trouble has been brewing for a while. The housing benefit cap was always going to force migration from inner London to the outer boroughs. Inevitably it is going to force out-migration from London. The huffing and puffing by Shapps and Duncan-Smith is so much hot air. This is what they wanted.
But it is hard to see that this is going to end well. If London boroughs do succeed in exporting households to the Midlands and the North then that is going to cause all sorts of problems in the housing market and beyond. And London will become increasingly disconnected from the rest of the UK. A playground for the rich, but with a misfiring economy? In a few years it will lack the pool of labour necessary to sustain essential low paying service industries.