Rogue Landlords and the Benefit Cap.

Nine billion pounds of taxpayers’ money goes to private landlords every year in housing benefit.

And the Institute for Public Policy Research estimates that at least £3bn of that money is spent on poor quality accommodation annually.

BBC Panorama showed a programme last night called ‘The Great Housing Benefit Scandal’ (http://www.bbc.co.uk/news/uk-32381471) This is not news to me.
Whilst delivering leaflets in this area of London terraced housing,  I find that many are subdivided into 4 or more flats. One has 11 letterboxes. These houses are built as 3 bed residences with a box room. The area is green and leafy and I had no idea before leafleting that this area was so overcrowded, I’ve been living here for decades.

I have visited houses nearby in London where the building has been subdivided into tiny boxes.  Tenants in these tiny boxes tell me they are paying £1,200 per month each which is our tax money spent in the form of housing benefit. This also leaves no money for them to live on, because of the benefit cap. All their permitted benefits go straight to the landlord.

Because of the selling off of council houses, there is nowhere else to put vulnerable people in this part of London. These places are filled with young single mothers, families and the disabled. Nobody else stands a chance of being housed at all locally. This is all due to greedy landlords, the selling off of council homes, and the benefit cap. Two out of three of these causes are policies brought in by the Conservatives.
Here’s an article by the excellent Kate Belgrave published in March http://www.katebelgrave.com/…/the-real-scroungers…/
The house next door to mine, once a family home, is now 4 flats containing 11 people, with no fire exit from the top floor. The tenants are frightened of a potential fire, they have small children and live in the converted attic. But they cannot tell the council because they’ll just be evicted, and its nigh on impossible to find an affordable flat in London, no matter how cramped and unsafe. This is a working family, not on benefits.
And its not as if the government doesn’t know. Here’s a Panorama program saying the same thing from 2010: http://news.bbc.co.uk/…/fron…/newsid_9122000/9122529.stm This was before the benefit cap.
The benefit cap means that NOBODY on benefits can afford a private rented flat in Inner London, or most of outer London. There are no council flats, they are being destroyed in their thousands and replaced by ‘luxury apartments’. The local authorities are being forced to satisfy their statutory obligations to house the vulnerable by placing them into slum rat holes, or move them hundreds of miles away from their support networks to where rents are cheaper. This is pushing up rents outside of London, too.
The Residential Landlords Association agrees there’s a problem, but says we don’t need more legislation. They say the existing legislation is perfectly adequate, the problem is that savage cuts to Local Authorities budgets means they cant enforce the laws that already exist. Last week the Institute for Fiscal Studies showed that over the course of this Parliament, the budgets of local authority enforcement departments have been cut by over 37% per head of population in England. http://news.rla.org.uk/private-rental-market-is-being…/

My local community self help group, Kilburn Unemployed Workers, has had to set up a sister group just for housing, because of the terrible situations people are telling us about every week. The local council is useless. The local Citizens Advice Bureaux  have been closed down. The charities are starved of funds and most cant take on cases, only ‘give advice’.

The foodbanks are thriving.

Argotina

Bucking the trend: Poll shows huge opposition to privately-run public services

The public are overwhelmingly opposed to private firms running public services, a new poll has revealed.

The findings, in a Survation poll for campaign group We Own It, reveals the extent of public opposition to the role of Serco, G4S and others in providing public services.

Sixty-three per cent of people think Serco should be banned from bidding for any new public contracts after the firm was investigated for overcharging on government contracts.

Just seven per cent believed they should be able to bid for government contracts now.

Fifty-nine per cent of  people thought G4S should never be able to bid on another government contract after it overcharged for prison tags.

The poll comes as campaigners target Serco’s annual general meeting in London.

“People are feeling more than a little sick of Serco – too big to fail, too sprawling to deliver but too profit-hungry to serve us properly,” Cat Hobbs, director of We Own It, said.

The poll suggests the public’s hostility towards private provision of public services varies depending on the sector.

Read the rest of ths article here: http://www.politics.co.uk/news/2014/05/08/bucking-the-trend-poll-show-huge-opposition-to-privately-run

 

“Private landlords are being asked what the rent is and some will take whatever housing benefit will pay. What we are talking about now is the old style Rachmanism, in particular – a slum landlord who made huge profits but did nothing to the accommodation that he owned.”

In the second part of our interview with housing support officer Jane Walters* (Read the first part here)we talk about how welfare reform has affected the lives of her clients and her job…

How have the changes to welfare and benefit cuts affected your clients?  

“We haven’t seen the worst of it. I think there’s going to be a huge impact from the benefit cuts. People think it’s just the bedroom tax but it’s not. Obviously we know that’s a huge impact, a lot of families and older people who have had their families now have to move out into the private rented sector.

“For our tenants, for one there’s limited move on.  The main route out of support accommodation is into the private rented sector. What’s the average rent in London, about £200-250 a week?

“Private landlords are being asked what the rent is and some will take…

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It turns out that benefits street is populated by rich people

Wealthy private landlords are being exposed as the new face of the benefits scrounger taking Britain for a ride

Another day, another couple of front page headlines damning benefit scroungers. Except today? Today is different. The claimant-bashing Tory MP Peter Bone is apparently under investigation for an alleged housing benefit fraud relating to his mother’s care home costs. Over at the Mirror, the Queen and Prince of Wales are revealed to be reaping a fortune in publicly subsidised rent payments to their privately held property empires. I have to admit, for a snarky Guardian writer tasked with sharing First Thoughts on the day’s breaking news, this is all just too good to be true.

Bone, it must be stressed, fully denies the allegations, and legal formalities forbid comment. The Mirror’s scoop comes as part of an extensive research exercise with the GMB union and is gleaned from freedom of information requests. It is understandable that the Royals grab the headlines – these payments represent a little cherry on top of the whole cake of the civil list and personal wealth that fund a lavish lifestyle of privilege earned only through accident of birth. But appropriately enough, they feature here as merely the salient symbols of a system that is rotten. The full list of private landlords growing rich from taxpayers’ handouts is like a who’s who of the landed aristocracy, the great and the good. There is the Duke of Westminster, inevitably – the eighth richest person in Britain – whose Grosvenor Group scoops £243,000. Ninth Baronet Sir Richard Sutton is grabbing £68,000, a paltry sum compared with the £195,000 paid to Lord Robert Iliffe. And a Tory politician, Richard Benyon MP, with a personal wealth of £110m, is bringing in pocket money of £626,000 per year in housing benefit.

Elsewhere, less illustrious and notable names are doing quite nicely out of the system too. Faceless corporations with addresses in the Cayman Islands or Guernsey, of course. Or those who mine gold from the grimmest depths of poverty, such as the owners of one hotel in Glasgow, who claimed over £1.5m from housing the homeless in squalid, rat-infested rooms.

Nobody knows exactly how much of the nation’s benefits bills goes directly to private landlords. One recent estimate put the bill at £35bn over three years. The situation is largely a consequence of a degraded social housing stock that can be traced back to the right-to-buy policy and the liberalisation of the rental sector of the 1980s. Whereas once council housing served to keep housing affordable, and rent controls and protected tenancies acted as buffers for those in the private sector, the open market has led to galloping costs, creating a direct river of cash that flows direct from the less wealthy taxpayers to the wealthy and – all too often – the tax evader. Meanwhile, the one available tax policy that would have a chance of recouping some of this vast wealth – a land value tax – remains mysteriously unpopular with political parties.

Whenever there is a phone-in show or a tacky televised debate about benefits culture, someone always demands to know where all this money is going to. To a large extent, here is the answer. Britain’s benefits bill is not going to pay for flat screen TVs, satellite dishes and white cider, but a fair hunk of it is for country estates, mansions in suburbia and yachts in the marina. Britain is indeed being taken for a ride by our benefits culture. It is not the poor behind the wheel, but the rich.

By Ally Fogg in the Guardian, 24th Feb 2014: http://www.theguardian.com/commentisfree/2014/feb/25/benefits-street-populated-rich-people-private-landlords?CMP=fb_gu

Government overturns Human Rights Act liability for care providers

The government has narrowly won a vote to block the extension of the Human Rights Act 1998 to people who pay for their own care or use independent home care agencies.

 

Care minister Norman Lamb’s amendment to the Care Bill reverses a change made to the bill in the House of Lords, which would have enabled recipients of home care and self-funding residential care to challenge independent providers under human rights law.

 

In the debate on the bill on 21 January, 12 MPs voted with Lamb and 10 voted to retain the House of Lords’ amendment.

 

Lamb argued that the Human Rights Act “is about the relationship between the state and the individual” and “was not intended to apply to entirely private arrangements” such as that between a self-funding care recipient and their private care provider.

 

He said people in privately-arranged and funded care could challenge their provider though their contract, or through civil or criminal law if an offence was committed.

 

Those who received home care that was arranged by their council had Human Rights Act protection for the relationship between them and the local authority, he added.

 

Additionally, he said the Care Quality Commission’s (CQC) new fundamental standards would apply to all organisations registered with the inspectorate.

 

“The CQC will seek to ensure that all registered providers comply with the aims of the Human Rights Act in how it applies its inspection regime and how it uses its enforcement powers, including prosecution,” Lamb added. “The risk of prosecution is surely a greater fear than the risk of a claim under the Human Rights Act in a civil court.”

He argued that the House of Lords’ amendment would not provide any additional protection to care recipients. He said: “Supporters of the clause have not produced a body of cases where the absence of the provisions in the clause has led to people being denied justice. That suggests that the clause is being proposed, in a sense, as a sticking plaster to deal with other failings of the care system. That is the wrong approach in principle and in practice.

But shadow care minister Liz Kendall said the House of Lords’ amendment would have given all care users equality under the law. She said: “There are clear gaps in the system, with some people receiving publicly funded care being able to seek redress directly through the provisions of the Human Rights Act, but others, in private or third sector-provided home care, not being able to do so.” She cited the case of a woman evicted form a care home after expressing support for the right to die as an example of someone who would have benefited from the extension Human Rights Act protection.

By Chloe Stothart in ‘Comunity Care’ 27th Jan 2014: http://www.communitycare.co.uk/2014/01/27/government-overturns-human-rights-act-liability-care-providers/

Are private landlords about to pull out of the housing benefit market, or not?

Mixed Messages

It’s one of the most crucial questions for the future of the housing system but the answer may be more complex than recent publicity suggests.

The alarm was raised when Fergus and Judith Wilson, the King and Queen of buy to let, revealed that they were evicting all of their tenants on benefit. A poll yesterday by the website spareroom.co.uk found that only 18 per cent of landlords currently rent to claimants, down from a third two years ago.

A combination of different factors seems to be at work here, starting with the April 2011 cuts in the local housing allowance, continuing with further cuts such as the overall benefit and culminating in concern about the impact of universal credit and the presumption that the housing element will be paid direct to the tenant rather than the landlord.  The most worrying finding from the poll was that half of those currently letting to claimants said they wouldn’t after the introduction of universal credit.

However, a survey in London by the Residential Landlords Association (RLA) presents a more mixed picture despite the fact that the capital is where many of the housing benefit cuts are having the biggest impact. In contrast to the poll, 36 per cent of landlords say they continue to let to benefit claimants and 63 per cent say their tenants have not fallen into arrears because of the cuts.

In terms of specific changes, 59 per cent say they have not stopped renting to claimants under 35 because of the change to the single room rent but 74 per cent say they are more reluctant to let to claimants because of the benefit cap.

So far, so good for the DWP and its hopes that the private rented sector will absorb the changes but only 9 per cent of RLA members say they have reduced their rents because of the LHA changes and only 6 per cent say they would be willing to drop the rent so their tenants could stay in London. Meanwhile 46 per cent have concern that working age claimants whose benefits are restricted will be driven out of the capital altogether.

This is at odds with the hardline stance taken by the Wilsons across their 1,000-home portfolio in Kent. They say they will refuse to take tenants on housing benefit and have ended the tenancies of 200 existing claimants who should ‘get a job’.

In a series of media interviews over the last month, they have cited many reasons for this decision: principally the non-availability of rent guarantee insurance for claimants but also rising levels of rent arrears, the shortfall between LHA rates and rents, the prospect of direct payment under the universal credit and the availability of alternative Eastern European tenants who are working.

If you haven’t seen them yet, watch Fergus Wilson’s ‘If I’m heartless then all landlords are’ interview with Channel Four News and read his bizarre ‘Fergus calling Dave’ statement to The Guardian. Discussion forums reveal some frustration from other landlords with ‘the story that refuses to die’.

The extensive coverage has certainly raised the media profile of the housing benefit issue but are the Wilsons representative of private landlords as a whole? If the London survey perhaps suggests not, are the more professional landlords who tend to be members of national organisations taking a different attitude to the small buy-to-let investors in the website poll?

Richard Lambert, chief executive officer of the National Landlords Association, says its research shows ‘more and more landlords moving away from renting to tenants claiming benefits’. However, he says it also knows of many landlords who have never had a problem and specialise in the claimant market. ‘They tend to be the more experienced landlords with larger portfolios, who understand how to manage tenancies to ensure stability and minimise the risk of arrears.’

RLA consultant Bill Irvine argues that there is no need for landlords to follow the Wilsons’ lead: demand is high, margins are good and the threat posed by the universal credit is exaggerated. He says the government has already made concessions on direct payment and in any case the national introduction of universal credit will not happen until after the 2015 general election.

In the Commons this week, ministers played down fears of a private renting crisis. Housing minister Kris Hopkins said that ONS showed that rents were rising by 1.1 per cent in England and 1.9 per cent in London, which were both below inflation, and boasted about £2 billion of bids for phase 2 of Build to Rent. Asked by Labour’s John Healey how he would ensure that claimants were able to access the market, he said:

‘The key to making the private rented sector accessible to all is to build more homes for rent. That is why we are investing in the private rented sector through the £1 billion Build to Rent fund and giving £3.5 billion in guarantees to get builders building—and we will deliver 170,000 new affordable homes by 2015 through this process.’

Labour’s Sheila Gilmore tackled communities secretary Eric Pickles over his denial in an earlier debate that landlords were refusing to rent to people on housing benefit. Given the reports about the Wilsons, she asked, would he carry out a proper inquiry? Pickles replied that ‘there are a lot more private landlords than just that particular gentleman, and I do not think he represents anything that speaks of the sector as a whole. The short answer is no.’

Only time will tell if that complacency from Pickles is justified but Hopkins’s response of using stats about affordable homes that are not privately rented does not fill me with great confidence. Neither does his comparison between rents and inflation. At a time when rents are still rising faster than both earnings and the 1 per cent cap on increases in the local housing allowance it is completely irrelevant.

If the action taken by the Wilsons is unrepresentative of the sector as a whole, the caps and cuts are undoubtedly having an impact on landlords as well as tenants. It’s one that will vary around the country according to local market conditions but as demand continues to rise the pressure grows. Housing benefit may have taken the strain for more than 20 years but for how much longer?

by Jules Birch on ‘Inside Housing’ 23rd Jan 2014: http://www.insidehousing.co.uk/home/blogs/mixed-messages/7001775.blog

Eviction of tenants on welfare ‘will create benefit blackspots’

A big landlord’s decision to reject housing benefit claimants is the latest symptom of a trend that could see the low-paid excluded from whole areas of the country, says a leading charity

Britain is witnessing the emergence of “benefit blackspots” as welfare claimants are forced to move out of the towns of their choice after being evicted from rented housing by private landlords.

Housing charity Shelter has warned that entire UK communities could become claimant-free zones, after the Guardian revealed on Saturday that one of Britain’s best-known landlords has sent out eviction notices to every tenant who is receiving benefits. Fergus Wilson, who owns almost 1,000 properties in Kent, has also informed letting agents that he now refuses to accept applicants who need housing benefit.

The charity said that a number of other landlords had already taken the same action. The issue has raised the prospect of claimants being clustered in the least desirable locations throughout Britain, and forced into the worst quality housing.

Roger Harding, director of policy and communications at Shelter, said: “It is very worrying. If this policy continues over the long term, we will see blackspots in the country where people on housing benefit simply cannot find anywhere reasonable. There’ll be areas where, if you lose your job or become ill, and you try and fall back on housing benefit, it won’t be high enough for you to find somewhere. Unless you have savings, you’re going to move town.”

Harding said there were 500,000 people currently claiming housing benefit in the private sector, many of whom were at risk as rents rise and benefits are squeezed. “It is an awfully large number and includes pensioners and people in work who can’t afford their rent. This could affect any area where future rents really outstrip inflation and where there is a lot of pressure on the rental market.”

Wilson justified his move on economic grounds, adding that he prefers eastern European migrants because they default less than single mothers on benefits, whom he described as a group for which sympathy “is disappearing”. His move provoked a furious backlash on social media sites.

Shelter says it warned the government three years ago that the impact of its housing policies would result in claimants being adversely affected. At one point it was criticised by officials for “scaremongering”. The charity said the government had told them its decisions would ensure rents would start falling, whereas in fact they had gone up.

A statement from the charity said: “Keeping a home could soon become even harder for families who desperately need the short-term safety net that housing benefit is designed to provide. The rental market is broken and no one wins.”

Statistics from the National Landlords’ Association published last month revealed that the number of private landlords dealing with people on benefits has now halved to one in five.

Tenants on benefits in council or housing association accommodation have already been hit by the effects of the so-called bedroom tax, where housing benefit is cut if the home is judged to have a spare bedroom.

by Mark Townsend in ‘The Guardian’, 4th January 2014: http://www.theguardian.com/society/2014/jan/04/eviction-tenants-housing-benefit-blackspots