Reading the press this weekend we learn that
- Boris Johnson has likened it to “Kosovo-style social cleansing” in the capital and has vowed to resist it.
- An analysis prepared for him predicts a “50% increase in homelessness acceptances in the first year of the changes”.
- Labour MP Chris Bryant talks about the poor being “sociologically cleansed out of London”, and
- Local authorities of surrounding areas (for example Slough and Southend) are apparently braced for mass influxes of tenants unable any longer to live in the capital.
This is of course all about the forthcoming housing benefit changes. lt sounds a bit scary. Is it really going to be that bad?
Some of it is probably journalist scaremongering (anything to sell the papers), but it does look as if there are going to be big problems. I am only a residential landlord and tenant solicitor who writes a bit and has done a lot of eviction work, but here are a few thoughts that have occurred to me. Make of them what you will (and why not make a comment if you have a view of your own?)
If the housing benefit rates are going down, many tenants will no longer be able to pay their full rent. This will mean that landlords will have a choice. Either
- They will have to evict the tenants for non payment of rent, or
- They will need to reduce the rent to a level where the tenant will be able to afford to live there.
This last is not as unlikely as it sounds. A known good tenant can be a very valuable thing. After all regular rent and someone caring for the property properly is considerably better than someone who comes in agreeing to pay a high rent and then defaults, either because they cannot afford it, or because they have lost their job. Or, of course, because they are feckless anyway.
Some landlords with high mortgages will have no alternative. If their rent does not cover their outgoings they will not be able to survive. So their benefit tenants will have to go
However, I suspect that not all properties currently let to benefit tenants will find a market among the ‘young professionals’ able to afford the high prices. They (ie the properties) may be too scruffy for a start.
So the landlord will go bust, and his properties will be repossessed, and doubtless bought at knock down prices at these auctions where they are all sold. After which perhaps the new landlord (having lower mortgage payments) may be able to afford to let them again to benefit tenants, at a rent they can afford.
But what if the ‘social cleansing’ takes place and there is a mass exodus of housing benefit/low earning tenants from the capital? Who then will do the low paid jobs? The cleaners and the restaurant workers, the shop assistants and the low level admin staff? London (and other big cities which may have similar problems) will still need them. Their services are vital.
So far as I can see there will have to be one of three alternatives:
- They will have to travel in from the suburbs or wherever they can find a home they can afford (assuming they can afford the fares), or
- Landlords will have to reduce their rents, or
- Their employers will have to raise their wages
Or I suppose they will have to live in illegal overcrowded accommodation with a criminal landlord.
I suspect that (and no doubt the government is banking on this) the rents will go down. What do you think?