Benefit Cuts Lead to Homelessness Crisis

Analysis by the National Federation of ALMOs (NFA) and the Association of Retained Council Housing (ARCH) finds that almost 90% of Universal Credit claimants are in arrears with their rent. Almost 60% are in arrears for more than one month's rent, and facing the possibility of eviction from their homes.

Universal Credit (UC) is the government's flag ship welfare policy, whereby six different benefit payments are rolled into a single UC benefit, which includes the former Housing Benefit. It was introduced two and half years ago in some areas, and has been bedevilled with IT problems, which were said to be 'teething problems,' but the report says that the situation is actually getting 'dramatically worse.'

John Bibby, chief executive of ARCH, said: "We are extremely concerned with the upward trajectory of rent arrears for Universal Credit households. Not only are the numbers of households increasing as UC is rolled out, but the percentage of households falling into rent arrears and experiencing financial difficulty is critically high."

A report last month by the New Policy Institute (NPI), commissioned by the Joseph Rowntree Foundation, warns reductions in Council Tax Support (previously Council Tax Benefit) in some areas of England, are leading to home evictions. In areas where a minimum payment from claimants is required, of more than 20% of the full amount in some areas, evictions are rising. Local authorities are free to choose how much of the total Council Tax bill, they require claimants to contribute towards.

The report quotes a report by the Child Poverty Action Group and Z2K that found that research they did in London in 2015-16 showed there was an increase of 51% of claimants being referred to bailiffs than in 2014-15. There was also an increase in the numbers of claimants charged court costs and the report says that claimants were cutting back on essentials like food, clothing and heating.

Yesterday, the Evening Standard reported that Shelter, the homelessness charity, predict that 1260 families will lose their homes in the capital in the next month and over 7,370 over the next six months. In July to September last year, official figures show 4,580 families in London being housed in temporary accommodation of whom 40% lost their home at the end of a private tenancy agreement.

This after more general cuts to benefits, the benefits cap, those benefits associated with disability and the 'bedroom tax,' with a sharp rise in jobseeker claimants having benefits sanctioned, for up as much as three years. Where people are in work, wages are low and stagnating with in work benefits reduced. Pay day lenders and other loan sharks prey on desperate people and the situation gets worse.

Lack of genuinely affordable housing, insecure short term private tenancies and benefit cuts, compounded by court costs, all whips up the perfect storm for a homelessness crisis, which is pretty much what we have at the moment. I see it myself around where I work in central London, there has been a marked increase in rough sleepers in the last couple of years.

Some more facts about homelessness:

• Sleeping rough has serious consequences. On average, homeless people die at just 47 years of age, compared to 81 years for the average UK citizen. A homeless rough sleeper is 35 times more likely to commit suicide that the average person. 
• Two thirds of rough sleepers surveyed said they had been insulted by a member of the public, and one in ten said they had been urinated on.
• The streets are a dangerous place to be, homeless people are 13 times more likely to be a victim of violent crime than the general public, and 47 times more likely to be a victim of theft.

The government responded today by announcing support for a Parliamentary Private Members Bill, the Homelessness Prevention Bill, which will oblige local authorities to provide accommodation for people without dependent children. The government pledged an extra £48 million to fund the new duty, which councils said was too little. The government needs to change its whole austerity policy if it wants to resolve this situation. It is highly unlikely they will.

The government's drive to cut benefits and the localising of much of the welfare benefit system onto the shoulders of already hard pressed local authorities with central government grants continuing to be reduced, has created this crisis.

It really is a scandal that one of the most basic of human needs, adequate shelter, is getting beyond an increasing number of our fellow citizens.

The need for rent controls

If tenants had the model of rent control advocated by the majority of the London Assembly in the two years since the Mayor was re-elected, they could have saved a total of £2,796 in rental payments.

Darren Johnson, Assembly Member for Housing, has led calls to replace Assured Shorthold Tenancies with a five year tenancy agreement, during which time annual rent increases would be capped to provide a fair compromise between landlords and tenants.

Andrea Carey-Fuller, Lewisham Green Party housing spokesperson, writes more about the issue:

The statistics provide evidential proof of the urgent need for the rent controls being put forward by the majority of London Assembly members:

According to Rentals website Rentonomy 90% of central London is now even out of the reach of graduates who are prepared to rent just a room. So, for an average graduate earning £22,400 per year, an unaffordable room costs over £129 a week or £560 per month.

According to the GLA's own figures, 59% of the private rented sector is comprised of young adults aged between 16 and 34 (twice as high as the proportion of this age group in London's overall population (29%)).

The net effect of the lack of affordable housing is a direct increase in the waiting lists of people on the housing register. Again according to the GLA's own figures there are "over 350,000 households on housing waiting lists in London."

The Homelet Rental Index (April 2014 edition) states that "Greater London saw monthly and annual increases of 2.4% (March - April 2014) and 9.4% (April 2013-April 2014) respectively to £1,348 per month - the highest amount on record." This report goes on to state "it is currently 96.2% more expensive to rent a home in the capital than the rest of the UK... and tenants in Greater London are currently paying rents almost double that the rest of the UK."

Added to this is the fact that for too long the Capital has been and continues to be mis-used by the Mayor of London to allure foreign investors into the housing market. These investors have bought into new developments, often off-plan, forcing most Londoners (excepting the rich ones) out of the House Buying Market, which has driven up demand for rental housing, which has lead to the insanely high costs of private renting in London (putting most people including graduates effectively out of the private rented market). Additionally, a handful of powerful developers are reaping rich rewards from housing developments profits at the expense of affordable rents. The Convoy's Wharf development for example will only provide 15% (or just over 500 affordable properties) within a development of 3,500 properties. The remaining 85% will provide untold riches for the Developers who will gain also from the commercial leases as part of this development. A fair and just amount would be at least 33% - 40% of affordable housing which would still leave ample profit for the developers.

It is all about greed.

It doesn't have to be this way. There is nothing wrong with developers and landlords making a fair amount of profit; no-one is talking about taking away incentives for the private rental market. The introduction of fair and proportionate measures such as the security of five year tenancy agreements, with capped rent increases which protect the rights of the tenants whilst providing a reasonable rate of return for the landlord, would be a fair and proportionate way of satisfying the needs of all parties.

This is the 21st Century, and as an advanced, humane decent society, I think all of us would agree that everyone has a right to a roof over their heads. If graduates are struggling to afford to even rent a room in a house how are people and families living on low-incomes, or relying on benefits able to afford even the most basic housing? The answer is they aren't which is why we have over 350,000 people 'falling back on local authority housing' because there is no viable option to do otherwise until the rental market costs are established at sensible levels and rental controls are put in place to ensure that the private rental market is not able to continue to spiral out of control.

You can find Darren Johnson's Living Rent calculator here: londonrents.org.uk

Andrea Carey Fuller is a Green Left supporter

Rent Control is a Must

Written by Rob Ponsford

We have a housing crisis in this country, it’s an undeniable fact and it’s been that way for the best part of a decade if not arguably longer. But I want to first start by saying that without a doubt the biggest help to weather this crisis is the building of more social housing, however the reality of our housing shortage is such that we simply cannot build enough social housing fast enough for those who need homes today, yesterday, ten years ago.

Which of course brings us to private rented accommodation, the private landlord sector is a minefield to navigate and due to a lack of regulation is filled with poor landlords charging extortionate rents with tenants having a pretty poor standard of living. For many home owners who choose to become landlords they do so because homes are no longer just a place to live but something with an exchange value something to generate income or in a lot of cases a way to provide a pension.

In fact it’s this latter type of landlord I am most familiar with, a friend of mine who does not consider himself well off yet owns two homes rents his second home out. His reasoning when he told me this was because he wanted a pension as he believed the state pension would be gone before he got there and private pensions weren’t worth the paper they were printed on.

Now this particular friend has always been a more fiscal conservative type with his own money and despite his belief in not being well off he is in fact well off. I explained that many people might even consider him rich in comparison to themselves. This concerned him a little bit and out interest he asked me what my rent was (Now I should point out I am lucky enough to be in Social Housing even more so that I was one of the last people to receive a Life time tenancy before the coalition did away with them).

Suffice to say he was shocked to discover that there was just over a £200 difference between what I paid a month in rent to what he charged his tenants a month. Of course my friend isn’t alone in the world of Private Landlords who charge quite a world of difference from that of Social Housing.

So with Social Housing not being built at a sufficient rate for the minute the private rented route becomes the only route open to many, and of course a number of those people may very well receive some form or full housing benefit. The Benefit cap that has been brought in, is in part a supposed answer to this issue.

When in reality the solution is rent control, by legislating and making it a legal requirement for private rents to be more in line with social housing costs, private tenants will no longer spending half of their income on rents, those in receipt of housing benefit will no longer require as much benefit and the bill comes down.

Of course what about my landlord friend who sees his second house as a pension, well the obvious solution there would be to fix pensions easier said than done I know. There was a time when homes were a place to live, filled with memories and a person only wanted one now it is seen as a potential gold mine if you have more than one, a place where you can charge someone the earth and they should be grateful for it no matter what the cost. (London being a prime example of unregulated rents and greed)

In this country no one should be without a home that provides a certain level of comfort and a decent standard of living. More Social Housing is undoubtedly part of this solution a big part, but rent control is also a must for those private landlords because there will always be private renters and this two tier system doesn’t work and it has reached its breaking point.

It is time we simply said, it isn’t right and our Government will make sure being a landlord isn’t just an exercise in Greed but one of Moral and Social responsibility towards the people they take as tenants.

Of course Rent Control isn’t the only thing required length of Tenancies is an Issue and Tenancies of only 3 months or 6 months or even 12 months is insecure and in the private sector the tenant is at the whim of the landlord at the end of this period.

That isn’t conductive to a decent standard of living if someone decides to become a landlord then they should also commit to being one for a period that is of course suitable 3 years perhaps with the landlord being required to give plenty of notice 18 months say of a tenancy not being continued.

Of course these are just ideas but they are kinds we need to discuss, and social housing is by no means perfect I would love to see life time tenancy come back, so people new that it wasn’t a worry every couple of years that they had a home to raise a family.

But as I come back to rent control it isn’t just in housing such a control is required, commercial property is also a gold mine for those people who rent out such property. My experience of this comes from another friend who wanted to start a small business, he being a fully qualified mechanic decided that he wanted to open a garage.

Despite the recession and the banks, he wrote such a convincing business plan, and had support from his parents and family that the bank gave him the money. Like any new small business he struggled in the start but started making progress getting past 12 months being a milestone.

He then had the luck of getting a contract with a small fleet of transport vehicles, sadly because he had gone past 12 months of trading his rent rates where doubled through no reason other than 12 months had passed. It crippled him, he had to close his doors and turn down money that would be on his books and being able to grow his business due to nothing more than Greed.

Without a doubt rent control is a must for small to medium business, by charging them a reasonable amount it gives such business opportunity to grow and develop and not be crushed just as they might very well be growing. How much could my friend have possibly contributed to the local economy how many others could have done the same for their local economy?

What price should rent control settle rates on? Well that will depend on the size of the property number of rooms and council banding as this effects Social Housing rent.

But the need for it has never been clearer, we need to address the housing crisis in this country, Social Housing is a big part of this but so is the need to reform the private rented sector.

The private rented sector has become a hot bed of greed, the pursuit of money has become the end all and be all. Private rented sector is of course a business and like all business if you do not legislate then it will run a mock (the example being the minimum wage, if you no longer made this law how many businesses would continue to pay it? A business is there to make money and as much of it as possible it doesn’t care about social and moral responsibility, profit is the end all and be all.)

Legislation is there to make sure that the social and moral responsibility of society is enacted upon business (Minimum wage, unfair dismissal etc) this should be no different for private landlords who think it is acceptable to charge over 50% of someone’s wages that isn’t living its surviving, and sadly more and more aren’t even able to do that.

We want a more equal society, then it’s about time we made those who become Private Landlords realise there tenants are not cash cows to milk and that a home first and foremost is exactly that.

Rob Ponsford is a member of Plymouth Green Party and a Green Left supporter