London councils are having no choice but to send thousands of families out of their homes as the housing crisis deepens and some will be offered private homes as far away as Wales. They are getting ready for April’s benefits cuts when many tenants will be priced out of the private rental market in London.
A report predicts that 125,000 London households will be hit when the new rule puts a cap of £26,000 on benefits from any one household. The report found that many councils are already actively considering obtaining accommodation elsewhere because making up rent shortfalls will leave the authorities with a massive hole in the budgets. Councils have already acquired properties in Kent, Essex and Sussex, and they are investigating the possibility of approaching landlords with properties in Manchester, Hull and Merthyr Tydfil in South Wales to allow tenants to move there. Local councils in London say that because of demand, residential landlords see no reason to drop rents and have tenants on benefits living in their properties when they have other clients prepared to pay the going rate. It is no secret that holders of landlord insurance policies in London are doing very well and many will ignore tenants on benefits until the Government changes its mind on direct payments.
Alison Garnham, CEO of the Child Poverty Action Group, said “Families are facing the impossible situation of being told to move to cheaper accommodation that just doesn’t exist with London’s rising rents. London boroughs are staring at a black hole in their budgets as a result, with costs transferred from central to local government. It’s not right that children are left paying the price for London’s housing crisis, which they did nothing to create.”
Councils are looking for properties despite guidance issued by former housing minister Grant Shapps telling them that they must “as far as is reasonably practicable” offer alternative accommodation for families within the borough they live and council’s must also have proper regard for the disruption caused to households. However, it is going to be practically impossible to provide affordable accommodation to meet the need for homes in London.