Squeezed out: London landlords evict tenants hit by housing benefit cap

‘The social cost is immeasurable, lives are being wrecked,’ says Marylebone landlord

Amelia Gentleman
guardian.co.uk, Tuesday 24 April 2012 19.19 BST

http://www.guardian.co.uk/society/2012/apr/24/london-landlords-housing-benefit-cap

Officials at the central London county court have started granting eviction orders to a number of landlords in housing benefits cases, allowing them to begin eviction proceedings against tenants who are no longer able to afford their rents as a result of the new cap on the amount the government will contribute to rent payments.

During a busy rental repossessions hearing, one Marylebone landlord was there to evict a woman and her three children, the youngest aged seven, from the flat they have rented from his property company for the past two years.

This will be the ninth family the landlord has removed from their homes this year and he has a further 35 families that he has to evict over the next few months as the housing benefit cap takes effect. The woman did not attend and an order was granted in her absence.

“The social cost is immeasurable. Lives are being wrecked,” he said. “I don’t like ethnic cleansing, and that is what is happening.” He described the tenants he was in the process of evicting as “exclusively non-white”.

“I don’t think that it will save any money and I am very worried about the social implications. What is going to happen to the kids? We have tenants in the office crying, regularly,” he said, asking not to be named.

“Secure home life is important. See where this ends up in four years. See what social issues you are going to have… We are asking for trouble.”

The policy is making life complicated for his business because his income has been reduced and he is devoting substantial time and money to eviction costs. But for the moment he is confident that he can find new tenants for the properties at the pre-cap rate, once the housing benefit tenants are evicted.

As a landlord, he knows he will be viewed as the villain because he is launching proceedings to remove people from their homes, but he argues that in central London the drastic nature of the cut means that it is impossible for many property owners to keep tenants on at the reduced rate without going bankrupt.

“As a landlord you have financial concerns day in, day out. That happens all the time,” he said, but he said he was horrified by the process of removing so many families from their homes. He came out of one eviction hearing and “wanted to break down and cry”.

“I try not to get emotionally involved. It is a business – but the houses of families, it is emotional… I wish we could help more, but we have limited resources,” he said.

He said London’s social mix would be changed by the policy. Most of his tenants come from Syria, Iraq, the Middle East. “There is a social mix, that’s how it should be. We rub shoulder to shoulder in London.”

Some of the families he has evicted have moved into smaller one or two-bedroom flats, preferring to stay in familiar areas, near schools, but crowd several people to a room, he said. At least two have been split up during the re-housing process, with older children, in their late teens rehoused in separate accommodation from their parents.

Across London, Janet Townley said she had been forced to split up her family temporarily after being evicted from her home in East Acton on Monday. She was preparing to spend her second night with her husband, her 12-year-old daughter and her seven-year-old son in the Premier Inn in Hanger Lane. She had sent her three-year-old daughter and eight-year-old son, who has ADHD, to stay with her mother.

She had been receiving £450 a week in housing benefit for the four-bedroom house she lived in, but this was capped at £400 a week earlier this year under the new regulations. She was unable to make up the difference, fell into rental arrears, and bailiffs arrived to remove the family on Monday. Because of her son’s disability she has been told the council will try to find her something cheaper within the borough, but for the moment nothing suitable has been found and the hotel room has been booked until next week, costing Hammersmith and Fulham council about £69 a night for each of the two rooms.

“It’s very difficult. There are no cooking facilities,” she said, adding that she doesn’t have much money to buy ready made meals because she has spent all her spare cash on paying for a removal van and for storage for her belongings until something is found for her.

“My three-year-old just says ‘Mummy, I want to go home’. It’s horrible.”

At the central London county court, the duty solicitor Zena Grover, paid by legal aid to represent tenants, said the court was only beginning to see the full impact of the new policy, because councils were still giving out discretionary grants to help tenants pay the rent until they found new places in cheaper parts of London, but she warned that the cap would lead to a rise in homelessness.

“If a tenant is evicted because of rent arrears the council may not have a duty to help them because they are judged to have made themselves intentionally homeless. It hasn’t happened yet, but there will be a rise in homelessness,” she said.

The Marylebone landlord said he was unconvinced by the government’s assertion that rents will drop as a result of the cap, particularly not in the expensive areas of central London – Westminster, Paddington, Maida Vale and Hammersmith – where he owns and manages a portfolio of 200 flats.

The government talks “a lot about ruthless landlords” who are charging as much as £2,000 a week, he said, but those cases were extremely unusual, and most of the affected people were renting smaller properties. “I don’t think many people got as much as £2,000 a week, that was only for large families with eight or nine children. The reality in London, is that they are evicting people whose rent was £600 or £700 for a three-bedroom unit, which has been capped to £340.”

Landlords were unable to drop rents so radically, he said. “It is so way below reality,” he said. If the cap had been about the £500 level, there might have been room for negotiation, he said.

He understands that there will be no public sympathy for the position of London’s landlords. When he has discussed rent renegotiation with councils, “they say, you have made a lot of money, on property. You take the hit now,” he said.

However, he argues that his landlords are not millionaire property dealers but often professionals who have invested in property instead of paying into pension funds, and are now unable to make the mortgage payments because of the reduced rents, which is why they are evicting in order to find new tenants at the market rate. “These are people who have bought properties with their savings in the hope that they can top up their pensions. Some of them are teachers – how are they going to subsidise it on their salaries?” he said.

“Our doors are always open for negotiation. The last think we want to do is to make people homeless. Eviction is the most unpleasant thing,” he said.

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