With just weeks to go before the benefit cap takes effect, landlords are locking out tenants supported by state benefits
Tenants supported by benefits are being evicted as landlords seek new tenants whose finances won’t be affected by the benefit cap.
According to the Guardian;
“One of the advantages of working on the frontline of housing services is that you get to act as a barometer. Housing advisers and homelessness prevention workers can see the effects of government policies long before the statisticians.
While the column inches of the housing press are taken up by the bedroom tax and universal credit, it often appears that the benefit cap is sliding in under the radar, but its effects are being picked up by frontline workers everywhere.
The benefit cap is being ushered in from July. A person’s state benefits and their housing benefit will be limited to a maximum of £500 a week for families, regardless of whether the family has three children or nine. Benefits for single people will be capped at £350. Families in London will be most affected by this as private rents are far more expensive in the capital than in other areas of the country.
The moral argument about the benefits system is neither here nor there. It comes down to the sheer practicalities. If people can’t afford the rent, where are they going to go? Who will deal with them? And who will be footing the bill?
The expansion of the private rented sector is driven in no small part by the buy-to-let market, which largely comprises amateur landlords with one or two properties looking for a stable, financial alternative to pension plans.
Unlike large, professional portfolio landlords, they operate on a wing and a prayer. They often don’t have cash reserves to deal with repairs or a safety net to allow them to meet their mortgage obligations if the tenant misses even one month’s rent. It’s a hand-to-mouth arrangement that underpins much of today’s private rental market, which means the landlord’s investment is precarious to say the least and this has a knock-on effect to their tenants, whose security is similarly affected.
Previous benefit caps have already hit tenants receiving benefits and left a substantial shortfall between the amount paid for housing benefit and the market rent. Where many landlords have simply wiped out the £10 or £12 a week shortfall to accommodate good tenants, under the new benefit cap the shortfall could rise to several hundred pounds a week, making letting to benefit recipients an unsustainable business model for many landlords.
Each day I see more tenants whose landlords aren’t planning to renew their contracts. Tenants then find difficulty finding another home as other landlords are also wary of the benefit cap and opt to avoid tenants supported by the state.
The people worst hit by the benefit cap are families with two or more children and the fact that they have children means that the local authority homelessness units have a statutory duty to provide accommodation for them.
It’s a simple process: landlords will not let to people who can’t afford the rent, so those already in accommodation will be evicted and the only place they can go is the local authority homelessness unit.
But homelessness units will struggle to keep up with the increase in applications, and with a statutory duty to house large families and a shortage of available council properties, the numbers of families put up in temporary and hugely expensive B&B accommodation will soar.
The housing minister, Mark Prisk, has condemned council homelessness units housing people miles away from their home area, but while London rents remain at such ludicrously high levels local authorities have little alternative and the benefit cap will only exacerbate the need.”
Ben Reeve-Lewis is a director of Easy Law Training