A rent arrears crisis in London

An inner London council has courted controversy by sending its seventeen thousand tenants a Christmas card urging them to pay their rent over the festive season.  The council has justified the cards by saying that forty-six percent of their tenants are in arrears.

Forty-six percent of seventeen thousand is just over seven thousand eight hundred.  Nearly eight thousand families in just one London borough are in arrears on their rent, and that is just council tenants we’re talking about.  Presumably it does not include private or housing association tenants.

While this statistic may seem astonishing, or perhaps even scary, it needs to be treated with caution.  First, many of the council’s tenants are presumably in receipt of housing benefit.  Housing benefit is paid every four weeks, and so any tenant in receipt of housing benefit is anywhere up to three weeks in arrears with their rent at any one point in time.  However this alone does not explain the statistic.

The council knows perfectly well that housing benefit is paid every four weeks, seeing as how it administers the benefit itself as well as being the recipient of many of those payments.  Surely it would not concern itself with eight thousand tenants in arrears if those tenants were in arrears merely because of housing benefit being paid less often than every week.

Another possible cause is the bedroom tax.  The bedroom tax has been in place now for roughly thirty-eight weeks, and the under-occupation deduction (the so-called bedroom tax) is either fourteen percent (for one spare room) or twenty percent (for two or more spare rooms).  A tenant with one spare room could therefore be more than five weeks behind with his rent as a result of the bedroom tax, while a tenant with two or more spare rooms could be nearly eight weeks behind with his rent.

There could be other reasons, such as working people either struggling to subsist on low incomes or even behaving irresponsibly with their money.

As I understand it, social housing landlords – be they local authorities or housing associations – are not supposed to seek to evict any tenant except as a last resort.  Therefore we would expect Hammersmith and Fulham not to seek to evict any tenants except for a remarkably bad arrears predicament – but of course the situation must be fairly bad in at least some of the eight thousand cases if the council has seen fit to send out Christmas cards offering a stark warning.

Hammersmith and Fulham is one of thirty-two London boroughs.  A similar situation in each of those boroughs could realistically equate to more than a quarter of a million households across Great London in arrears.  Even if we assume that only five percent of those are serious cases, then that still makes nearly thirteen thousand households in total.

Will 2014 be the year in which thousands of social housing tenants across London are evicted from their homes and end up living rough on the streets?  Will there be whole families begging outside every tube station?  Every shopping centre?  Every public house?

Time will tell.

Previous posts on related issues include:

Rough sleeping: when will it be you?

Another victim of the bedroom tax