The Coalition Government’s planned cuts to housing benefits could have a drastic impact on London neighbourhoods, a forthcoming study by the University of Cambridge has revealed.

The study, which was commissioned by homeless charity Shelter aims to assess the social impact of the recent cuts in Local Housing Allowances (LHA).

Due to be released no later than next week, the study is titled ‘Which neighbourhoods in London will be affordable for Housing Benefit claimants 2010-16, as the government’s reforms take effect?’

The study is being issued by the Cambridge Centre for Housing and Planning Research (CHPR), which is based within the Department of Land Economy.

Alex Fenton, who is in charge of the report, said the Government’s measures "have not been fully thought through." Although Fenton is careful not to take a political stance, he points out that it is evidently poorer households who will be affected, as LHA is a means-tested benefit.

The proposed changes could have implications for many current students. According to one third-year economist, "Many students might not anticipate this now, but quite a few graduates do move to London to look for work, and it is possible that some of them may need to apply for housing benefits before they find a job."

The proposed ‘Housing Bonus’ scheme would ostensibly provide incentives to local councils to increase social housing provisions, but there is ongoing debate as to whether this will be as effective as the ‘regional targets’ in place under the previous Labour Government, which made a certain level of provision mandatory.

However, the report is chiefly concerned with the private sector, which is predicted to become "largely unaffordable" to a growing extent.

The new policy (from 2011) of using the thirtieth percentile of the range of local rental rates as the upper limit of housing benefits, is expected to eat into household budgets.

The decision to cap LHA at £290 per week for a two bedroom dwelling, (and equivalent rates for other sizes) will impact especially on areas with high property values, like London and Cambridge.

Fenton does not speculate as to the social consequences, but dire prophecies abound of poorer income families being forced to relocate into ‘ghettos’ far from the city centre where jobs may be scarce.

The long-term forecast is bleaker still, as from 2013, the maximum LHA is to be paid not by reference to actual local rents, but by Consumer Price Index inflation. This is defined in the report outline as "the median of the forecasts of independent economic consultancies," published by HM Treasury in August 2010.

Although it is assumed that rent prices will increase at 3.6% a year, average annual rental growth in England from 2001-2 to 2007-8 was more than 6%.