Builders who specialize in loft extensions in London may see a steep decline in their business because the government's cap in housing benefit will make it less lucrative for landlords to divide properties into apartments and annexes, according to some analysts in the construction industry.
The new cap on housing benefit was announced by chancellor George Osborne in the government's autumn spending review and could see thousands of benefit claimants priced out of the capital, resulting in lower demand for the construction of loft extension-style apartments in the capital.
News of the housing benefit limit has made waves across London particularly; with mayor Boris Johnson controversially denouncing the policy, saying that he was against 'Kosovo-style social cleansing.'
Clinton Foakes who runs a building firm in Ealing which specialises partly in London loft extensions said: 'We are not too concerned about the housing benefit cap affecting demand for our trade.
'Most clients opting for a Loft Extension in London are commissioning the work to enhance the utility of their homes for their own personal comfort and enjoyment; not in order to lease the extra space to benefit claimants.
Real Estate analyst Felix Fortescue said: 'London's loft extension-style housing will always be in demand by working people in the capital, and will also still be financed by housing benefit at the lower end of the scale, so builders need not fret too much.
'However, the days when housing benefit could be expected to cover the rent on a plush and spacious London loft extension apartment in an exclusive area are definitely over.
'So a small slump in demand for these developments may not be out of the question, as some benefit claimants move out of the capital rather than switch to a more modest dwelling within it.'He added.
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