‘We are not a charity’

An eloquent argument for social housing came from an unexpected source on Panorama last night.

The programme covered what it called a new housing crisis: homelessness and the private rented sector. The hook for Britain’s Homeless Families was the fact that the number of people being made homeless by private landlords has trebled in the last five years but it also looked at families stuck in temporary accommodation and facing eviction because of the benefit cap.

It began with the case of Vicky, who was forced to leave her home in Kent because she was on housing benefit despite the fact that she had never been in rent arrears and never had a complaint about her. ‘I’m a bit shocked actually,’ she said. ‘If you treated the property well and you paid your rent I couldn’t see what the problem would be.’

When I tell you that she was one of 200 tenants on housing benefit evicted by the same landlord in Kent you will probably guess that the landlord in question is Fergus Wilson. The man dubbed the king of buy to let justified the decision in the blunt language we’ve come to expect. ‘We are in business to make money, we are not a charity.’

His point was that rents are rising faster than housing benefit and that makes claimants too risky (though he’s been quite happy to allow housing benefit to finance his empire up to now). ‘If we went to the other extreme of having 100 per cent people on benefits we would go pop because of the default rates.’

Presenter Richard Bilton asked him: ‘Do you think you have a moral responsibility to these people or is it only profit that matters?’ Wilson replied: ‘Well we’ve had a moral responsibility for a number of years but it’s just reached such a point that we cannot continue.’

A brief interview followed with housing minister Kris Hopkins:

Bilton: ‘Is it acceptable do you think to evict people because they are on benefits?’

Hopkins: ‘Um, well, in principle, if they’ve done something wrong…’

Bilton:

‘No, their tenancy ends, they’re on benefits, you’re a landlord and you don’t want benefits in your property.’

Hopkins:

‘Well, first of all an individual private business will make commercial decisions and if they actually decide they don’t want somebody on housing benefit in future that’s a perfectly legitimate thing for them to do.’

We then cut back to the case of Vicky and her daughter in Kent. ‘You move into a place and if you’re not expecting to have to move on every few months you start to put down roots and you start to think about the school that your child will go to,’ she said. ‘It just feels so unfair that in this day and age the rug can be pulled out from your feet like this in terms of where you live.’

If you missed Panorama last night, you can watch again here. The programme covered several other cases involving people in different circumstances. I’ve concentrated on the first one because I think it illustrates the problem most clearly: a tenant is evicted because she is on housing benefit; the landlord justifies the decision on the grounds that rents rising faster than benefit rates will inevitably mean arrears that threaten his business; the minister washes his hands of any responsibility by saying it’s a commercial decision.

The thing that stuck me is that all three of them are strictly speaking correct. Vicky is losing her home through no fault of her own. Wilson knows that local housing allowance rates have been cut and are set for years of below-inflation increases. Hopkins is right that there’s nothing to stop landlords doing what they want at the end of a tenancy.

But if you put the three statements together you wonder who is responsible if it’s not the tenant, the landlord or the government. The short-term answer, shown later in the programme, is the local authority and the taxpayer as we pick up the bill for homelessness and temporary accommodation.

Last week’s homelessness statistics showed that 58,250 households are in temporary accommodation (up 16 per cent since the election) including 81,000 children. Of those, 4,480 are in bed and breakfast (up 86 per cent) including 480 families with children who have been there more than the statutory six weeks (up 200 per cent). And 12,430 of the households in temporary accommodation have been sent to another local authority district (up 36 per cent in the last year and 120 per cent since the election).

Getting back to Panorama, the number of households accepted as homeless as the result of the end of an assured shorthold tenancy has trebled from 4,580 in 2009/10 to 13,650 in 2013/14 and has risen by another 14 per cent in the last year. Although the total number is lower than between 1998 and 2004, that takes no account of the way that homelessness prevention work has halved the number of acceptances. Loss of an assured shorthold now accounts for 27 per cent of homeless acceptances compared to 13 per cent ten years ago.

So the longer-term answer is that successive governments are responsible. First, we stop investing in social housing and sell existing stock under the right to buy. Second, we outsource housing provision to private landlords and create the conditions for the sector to expand. Third, we assure landlords and tenants that housing benefit will ‘take the strain’ of higher rents. Fourth, we fail to build enough homes so that house prices and rents rise. Fifth, we decide that housing benefit is too expensive and it will no longer cover the full rent. Sixth, we discover that the solution to homelessness is actually the main cause of homelessness: an assured shorthold tenancy. And on the seventh day we sit back and admire the revolving door we have created.

The world is of course not as simple as Fergus Wilson suggests (or I do in my neat summary). Many landlords regard his media appearances as an embarrassment and many people are working hard to make the system we have work as best it can (Havering’s long-term leasing featured in the programme, for example).

However, when Wilson says that ‘we are in business to make money, we are not a charity’ he not only speaks the truth about private landlords, harsh though it may be, he also spells out why an alternative is so desperately needed. One that’s not in it to make profits and might even be a charity.

Originally posted on my blog for Inside Housing