Our Response to London Assembly Review of Private Rented Sector

Haringey Housing Action Group response to London Assembly’s Housing and Regeneration Committee review of London’s Private Rented Sector – Session 2: Affordability and Tenure

Haringey Housing Action Group

Haringey Housing Action Group has been supporting local residents with housing problems for about three years.  Our aim is to support people in a way that they feel empowered to take action to resolve their own housing problems. We also encourage people with similar experiences to support each other and find solutions.  We currently meet twice a month and carry out outreach sessions in the borough, at least fortnightly, mainly outside Haringey Council’s customer service centres.

We are open to residents with any kind of tenure.  However, we have noticed a shift in the tenure of new people approaching our group.  Until about 18 months ago, most new people were homeless and in priority need, and were having trouble in being considered as such by the council’s housing services.  Over the last 18 months, we have been increasingly seeing people who are in private rented accommodation.

Our responses below are based on experiences from people within our group.


Why is the cost (in terms of rent and public subsidy) rising?

When LHA rates were first introduced, we noticed that landlords treated LHA as the minimum they could get for a property, even though it was at that time set to reflect the median rent for that area. Therefore, landlords who owned substandard properties, or who might have previously let properties at the lower end of the market, were likely to raise their rents to the LHA rate.  This would not affect the LHA rate (as it was set at a median rate), however, it increased the amount paid to landlords through housing benefit.

With the reduction in LHA rates to the 30th percentile, Haringey Council has public funding to provide a dedicated team of advisors specifically for people who are facing housing problems due to the cut in their housing benefit.  This is an additional cost provided by the public sector.

On top of this, there are people in our group, and more that we meet on our outreach sessions, who are facing what could be called “anticipatory” eviction.  This is where a tenant who is a housing benefit claimant is served with a notice to quit without any accompanying reason.  In one situation, this was after a conversation between the tenant and the letting agent about raising her rent above the LHA rate, by £9 a week. Because the tenant said she would not be able to pay, she was never offered a tenancy at the higher rate, and the eviction proceedings are not recorded as being precipitated because of rent arrears.  She is accessing the council’s usual housing advice team, incurring additional costs to the council which are being triggered by the landlord/letting agent and the LHA cut.

In Haringey, there is also the problem of very few new properties being built.  We need an adequate supply of council (not just housing association) housing for all that need it, and all housing in new developments should be social housing, whether the development is being built with public subsidy or for private profit.

How can rent rises be made more stable and predictable?

Rent controls could be introduced, with a maximum rent being set in the borough.

What is the impact of rent increases on low income households and the implications of increasing public subsidy of private landlords? 

A tenant claiming housing benefit who is faced with a rent increase over and above the LHA rate has one of two options: to pay for the increase out of their benefits or income, or they will have to move.

At the moment in our group, we are just seeing the first wave of people being affected by cuts to LHA. We have not encountered anyone who has been through the full eviction process. The people affected are living in a state of limbo, where the landlord is evicting them, but the council is not prepared to take the responsibility of housing them – not until the actual hour of the eviction. We have had two mothers with young families who have spent the summer in this situation.  They have felt anxious about going on holiday, and now, as their children are going to back to school, they are worried about how the eviction will impact on their children’s schooling. Both are in priority need and eligible for statutory help with housing. They have no desire to seek alternative accommodation in the private sector, because of the lack of certainty and stability, and the problem of rents rising above LHA levels.

Other people who have been coming to our meetings are having trouble finding any landlords who will accept housing benefit.  Historically, there has always been a section of landlords and letting agents who will not accept housing benefit.  However, in the last three or four months, we are encountering people who are approaching the council because they cannot find any landlords accepting housing benefit.  Of the very few that do, they require a guarantor who earns in excess of £35,000 pa. Such a guarantor is hard to find for the people we meet on low income.

The reason for the lack of landlords accepting housing benefit is clear. If a landlord takes on a tenant now who is claiming housing benefit, then they might only be losing out on £10 a week, but they know that in a year or more’s time, LHA will not keep up in line with any additional rent increases.  Therefore they are already not prepared to take the risk. They know that the tenant will be unlikely to make up the shortfall, so why invest the time in them now, only to go through a possibly lengthy eviction process in a year’s time?

We would like to see an end to this kind of discrimination against people on benefits or low income.

What is the nature scale and extent of public subsidy to the private rented sector in London?

We see that public subsidy of the private rented sector goes beyond just publicly funded housing benefit going into the pockets of private landlords.  There are the additional costs:

  • to council Environmental Health departments, by landlords who fail to carry out repairs. Our experience of the environmental health officers is that their caseloads are already too high, and they will only act when under pressure from groups such as ourselves.
  • to local education budgets, when schooling is disrupted due to evictions and families having to move away from the area of their children’s school.
  • Higher rents increase the extent of the poverty trap, making it less likely or harder for people on benefits to find work that will cover their costs.
  • As argued earlier, council’s homelessness persons units are having to deal with more people approaching them.  Where people are in priority need, the council will have to pick up the tab for housing these people.
  • Council’s general advice services, and the voluntary sector, are also bearing the cost of the rent increases.  Where there is no statutory duty to house someone, the individual with a housing problem does not then go away and solve their own problem.  We find the same people returning again and again to the council’s offices or to our group, because they are unable to comprehend that there can be no safety net for someone in their situation.

What will be the impact of changes to welfare policy? Is there any evidence that rents are reducing?

We have not seen any sign that rents are reducing.  Although it’s possible that lowering LHA rates may have some downward pressure on rents, this is probably in the long run rather than the short or medium term. Located where it is, Haringey will see rent increases being met by tenants migrating out from the more central London boroughs. Some properties are already being used by councils from central London to house their own residents in temporary accommodation.  In the short or medium term, people are being forced out of their homes and neighbourhoods, breaking down or putting a strain on any family or friendship support networks.  It is hard to see this process being reversed, if it gets to the stage that rents level out or fall.

Does security of tenure through developing more flexible and longer tenancies – especially for families that would, in the past, have found homes in social housing – need to be addressed?

Yes. Many parents involved in our group state that the main reason for wanting to access council housing is because there is no security of tenure in the private rented sector.  They do not want to be moving every six or 12 months. They also express concern at the inability to get private landlords to carry out repairs and worry about increasing rents. But security of tenure is frequently the first reason cited.

September 3, 2012  Tags: ,   Posted in: INFORMATION