Row grows over 'social cleansing' of tenants priced out by private rents

Friday 27th April 2012

The ‘social cleansing’ row over a London council’s apparent attempt to ship hundreds of tenants who would normally be put into private rented accommodationto places as far away as Stoke-on-Trent has intensified.

Newham Council has written to housing associations to see if they could help with accommodation.

It blamed a combination of high private rents and housing benefit cuts for its move, saying private rented accommodation is unaffordable for families who rely on Local Housing Allowance.

The council has criticised the Government’s decision to cap housing benefit payments a, saying there is a huge gap between that and market rents. In Newham, as from this month, the most that can be claimed by an LHA tenant is £300 a week (four bedrooms), with other rates £69.27 per week (single room), £170 (one bed home), £207 .69 (two beds), and £259.62 (three beds).

The latest rental data shows that the average monthly market rent across London is £1,158 per month – meaning that most LHA amounts are unlikely to be sufficient.

See the separate story that follows, on the latest HomeLet research, and see also today’s David Lawrenson blog.

A Newham Council spokesperson added: “Alongside a number of other London councils, we are exploring the option of working with housing associations outside the borough to house people with an immediate need in the private sector.”

But housing minister Grant Shapps said it was blatant electioneering on the part of Labour-run Newham Council, and has written to the BBC – which broke the story – to complain about its coverage.

He complained that the coverage could be causing Newham people real distress, and said that the BBC had been ‘hoodwinked by politically driven scaremongering’.

However, the National Housing Federation said that Newham’s attempts to house up to 500 families away from the capital were just the tip of the iceberg.

It said the ‘desperate move’ by Newham was a consequence of cuts to LHA.

Jacqui McCluskey, director at the umbrella body Homeless Link, said: “Charities warned Government that housing benefit reforms could risk increasing both evictions and homelessness in the capital – something the Department of Work and Pensions own assessment predicted. 

“Because of LHA caps and a lack of affordable housing, homeless charities are already struggling to find clients private rental accommodation in London. Reports that councils are being left with little choice but to seek housing outside the capital only add to our concerns.

“We are working with our members to see if they have received similar requests from councils. If this is becoming common practice, Government must modify its reforms.

“With more welfare reforms in the pipeline, we must avoid making homelessness worse.”
 
Shapps has claimed that there are more than 1,000 properties for rental within five miles of Newham currently advertised on Rightmove.

But there are questions as to how many landlords are now accepting LHA tenants, even if they are happy with the rent levels.

Landlord bodies say that their members are quitting the sector, not just because of caps to the benefit, but because LHA is paid to the tenant, who is then trusted to pass it to the landlord.

There is also a question mark over Newham’s attitude towards private landlords: the council is attempting to be the first in England and Wales to introduce blanket licensing of every rental property in its borough, effectively regulating all local landlords.

The Residential Landlords Association said the Newham case proved that more needs to be done to help the private rented sector.

The RLA said there is a ‘crisis’ in the London private rental market, with a chronic shortage of rental properties.