The Truth About Housing Benefit

kamsandhu —  November 11, 2014 — 6 Comments

by Kam Sandhu @KamBass

In a climate of unrepentant cuts and increasing poverty, bureaucracy and discrimination for benefit claimants, one group of individuals are seemingly unscathed recipients of growing welfare payments: landlords. In the decade up to 2012/13 housing benefit payments doubled from £12bn to £24bn currently reaching the bloated heights of over £25bn. How has this area of welfare spending remained out of the spotlight in the welfare and claimant bashing trends of the last few years?

Image: capita Software

Image: capita Software

Housing benefits go entirely to landlords or housing associations. Claimants do not gain or cream some profit off the top as many politicians and media would like to insinuate. And according to Danny Dorling, author of ‘All That Is Solid’, the aim of housing benefit always was to line the pockets of landlords:


‘None of this new red-tape was the product of a left-wing created bureaucracy. The current housing benefit system was set up by the Conservatives in the 1980’s: they wanted rents to be able to rise freely to encourage private landlords.’

Danny Dorling, All That Is Solid


Indeed, the housing crisis we are currently in is one pushed along with intent by the Conservative party.

Thatcher’s sell-off of social housing through ‘Right To Buy’ with no intention of replenishment, increased the number of claimants forced to use private landlords, who are estimated to make £9.2bn from housing benefit this year.

Now with 5 million people on social housing waiting lists, a dwindling social stock, and a lack of guarantees for long-term tenancies, the desperation of tenants are further exploited through poor housing standards for top rates of benefit payments. 


“Private landlords are being asked what the rent is and some will take whatever housing benefit will pay. What we are talking about now is the old style Rachmanism, in particular. He was famous in the sixties for being a slum landlord who made huge profits but did absolutely nothing to the private rented accommodation that he owned. And he could chuck people out willy-nilly. What came out of that was all the fair rent campaigns and huge changes to the housing sector.”

Housing Support Officer Speaking To RealFare


Housing charity, Shelter, say that bad housing conditions are particularly ‘acute’ in the private rented sector with 40% of tenants in bad housing (‘Bad housing’ is defined by overcrowding or failure to meet the ‘Decent Homes Standard’ – click here for more details). Shelter also cite new powers to ‘discharge their homelessness duty into the private sector’ as a contributing factor to poor housing, accountability and increasing poverty for tenants in the private rented sector. In 2001, 10% of tenants in the private rented sector were living in poverty. In 2011, this had increased to 18%.

In contrast, landlords like Richard Benyon – the UK’s richest MP, receive thousands of pounds a year in housing benefit whilst at the same time, slamming welfare claimants and the ‘something for nothing’ culture. As claimants live in abject poverty, under threats of sanction and villifying in the press, Benyon quietly profits £120,000 in housing benefit in a year.

Or perhaps see the millionaire Kent tycoons Fergus and Judith Wilson, a couple who came out in the press last year to say they had no problem evicting tenants, and wanted to replace benefit claimants with working people in all of their 1,000 homes (yes, 1,000). The couple, as Benyon did, outwardly slammed claimants insisting ‘people should get off their backsides and work.’

Interestingly enough, the couple only became vocal about their supposedly ‘lazy’ tenants when the housing benefit cap was being introduced, and people started falling into arrears (even knowing that many were falling into arrears didn’t stop the couple upping the rent prices regularly either). In other words, when housing benefit would not cover any price they saw fit, suddenly the Wilsons were up in arms about the laziness of benefit claimants. The issue did not bother them when their rent payment was being covered. In the last line of this video, Fergus says ‘Gone are the days when you could rely on housing benefit’ which seems a statement more relevant to his bank balance rather than claimants.



The Benefit Cap

Whilst the benefit cap is a way of cutting the allowance a tenant may have to pay a landlord, it is a cowardly tactic to avoid interception of housing prices and rents.

We spoke before about Why the government doesn’t want to solve the housing crisis, and essentially this means that government will do all they can to avoid controlling or disturbing house prices, as they benefit Tory voters and provide some growth – even if this growth is only good for 1% of the population and detrimental to the rest.


Even in the ‘Help To Buy’ scheme, people are given aid by the government to get on the ladder, but nothing is done to abate the extreme pressures and prices involved. Instead, the government underwrites risk for the bank to sell to someone who has not got enough money. This is neither a long term solution nor a way of dealing with the heart of the problem.

Similarly, the benefit cap combined with moves to pay housing benefits to the claimant and not the landlord, means the government have weaseled their way out of dealing with prices. Simply suggesting that claimants could look for cheaper property while government fuels a housing crisis, record numbers of people are on low pay, poverty is rising and 80% of new jobs are in London, is patronising to say the least.

What the government has done by creating a benefit cap, allowing housing costs to soar, and paying benefits straight to the claimant is dissolve their responsibility in knowing how much that claimant needs for housing and living costs. If a parent is pushed into poverty, skipping meals and so on (of which we hear more and more stories) because the benefit cap leaves them little after paying an extortionate rent, then it just means they are left to suffer alone.


“They have brought in the benefit cap and now landlords are putting rent at the top of the benefit cap. So for single homeless people, a majority have very few skills, they are now stuck in a cycle of poverty because they cannot afford to pay £200-250 a week, and these are rooms – these are not studio flats. These are very depressing environments where people wil either relapse or fall into depression. I certainly would.”

Housing Support Officer Speaking To RealFare


In crueller intentions still, Danny Dorling explains how the housing benefit cap is not a new thing and its results are not unforeseen:

“The housing benefit cap is not a particularly new scheme when it comes to attempts to move poorer people away from richer areas. A generation ago the Conservative party tried to achieve the same outcome, but more subtly. In 1986 the Conservative controlled Westminster Council decided that the number of council house sales should be accelerated so that ‘a natural and permanent majority could be manufactured in Westminster.’ Some 10,000 council homes were earmarked to be sold privately when the tenants in them either moved on or died. In other words, those tenants were not to be replaced with people from a similar demographic; Westminster was to be gentrified and the political balance shifted by selling homes that were located mainly eight marginal wards. Eventually the policy was found to be illegal, but not until January 1994, long after it had its desired effects.”


Last week it was reported that a single mother of five, Titina Nzolamesa, was being made homeless because of the benefits cap. She is looking to the Supreme Court to appeal against the social cleansing of Westminster. While papers and media fill themselves with property adverts and opportunities for new developments, social cleansing is hardly mentioned, but it is happening. The difference between Danny Dorling’s example and now is that social cleansing is happening on a far greater scale, uprooting families not just to a neighbouring borough but to towns and cities across England. These impacts are neither unpredictable nor unknown by our government.

Boris was even pushed to comment that he would not allow a ‘Kosovo-style’ social cleansing to happen as a result of welfare reforms because these effects are so obvious. Nonetheless, his words are empty, no effort has been made to stop this happening.


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6 responses to The Truth About Housing Benefit


    House prices have gone up because of the Fractional Reserve banking system and that is what landlords have benefited from, so blame the banking industry for this one, not DWP. Landlords will soon be affected once Direct Payment comes into effect as tenants will be able to withhold payment from landlords who do not take their responsibility seriously.

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