Randeep Ramesh paints a bleak picture of what the government's housing benefit caps mean for the country (Ghetto warning as poor priced out of 800,000 more homes, 2 January), but in London it's even worse. Inner London is home to over 3 million people, living in 11 local authorities. These contain mainly mixed and balanced communities which contribute to the capital's economic and cultural success. Currently, 70% of these neighbourhoods are affordable.

Under the government's proposals, 80% will be unaffordable by 2016. Driving people out of their homes will ghettoise the city and put intolerable strain on a range of overburdened local services in outer London and beyond. No evidence supports the belief that capping benefits will drive down rents. On the contrary, the situation will get much worse – particularly in London. The stark decline in social rented housing, combined with declining new home ownership, is driving people into the private rented sector. The result is a lack of supply fuelling year-on-year rent increases way above inflation. Pegging the benefit caps to CPI rather than local area rents means housing benefit will cover less as rents keep rising.

London will be hit hardest, so why hasn't its mayor, Boris Johnson, argued for a regional variation to the housing benefit caps? Why hasn't he demanded a comprehensive impact assessment? And, above all, why does he have not one single policy to deal with extortionate rent levels in his new housing strategy?

Government plans and the mayor's failure to argue against them – informed by his commitment to free-market solutions – leave London facing social segregation on an unprecedented scale.
Nicky Gavron
London assembly member and Labour spokesperson for planning and housing

• I was struck by the language you used to describe the London property market (Job cuts in Square Mile expected to send chill through London property market, 5 January). London house prices have "outperformed" the rest of the country over recent years, you write. Since when does price inflation equal good performance? Would you write that gas or petrol prices have "performed" well? The UK economy is too based on the housing market (and allied financial services). It is a dangerous myth that house values will always rise in real terms; it encourages people to over-borrow, believing that house prices will rise so much that they can repay their debt when they sell; and it encourages banks to over-leverage themselves on short-term wholesale funding markets to lend long-term to home buyers. We all know where that got Northern Rock.
Steve Ryan
Uccle, Belgium