Haringey feels force of benefit cap as two housing associations threaten to repossess homes

Two housing associations in Haringey threatened to repossess tenants’ homes before the government’s benefit cap was introduced, it has been revealed.

On February 12, Newlon Housing Trust sent a letter threatening to repossess the homes of all its tenants in temporary accommodation, who, it calculated, might not be able to afford to pay the rent once the welfare changes were implemented in April.

The letter, signed by leasing officer John O’Neill, states: “I write to inform you that due to the welfare benefits reform and the changes to housing benefit payments from April 2013, Newlon Housing Trust will be applying to the court for possession of your home.

“We are taking this action as a precautionary measure because we do not know how the changes will affect tenants in our temporary accommodation.

“We are in the process of preparing the court papers for all temporary housing tenants so that if we need to return the property to the owner we will be able to do so without delay.”

The letter advised tenants to take the possession order to Haringey Council’s homelessness team so it could find them alternative accommodation.

Last Wednesday, it was revealed that another Haringey housing association, Genesis, had sent a letter to 57 residents in temporary housing on April 11, explaining it was in the process of obtaining possession orders “because our tenants may not be able to afford the rent we charge”.

Both associations have apologised for any distress they may have caused and said no one is going to be made homeless.

A Newlon spokesman said: “We appreciate that the letters could have been worded better and we are contacting all the people concerned to clarify the information we have sent them.”

The letters reveal the cap is causing problems for smaller housing trusts like Newlon.

A spokesman for the award-winning charity explained the reason it was applying for possession of a “small number of homes” was because it is “moving away” from providing temporary accommodation.

The trust is legally required to serve notices like these so that it can return properties to their owners if required.

This reason it is moving away from this is, in large part, the potential impact of the benefits cap, which limits entitlement to £500 per week for couples and those with children, and £350 for single people.

“If residents living in temporary accommodation, who pay market rate rents for their housing, do get into rent arrears due to a shortfall in housing benefit created by the benefits cap, we would be required to pay the difference to the owners of the properties,” said the Newlon spokesman.

“This would result in a situation where a not-for-profit charitable housing association would need to use the rental income from the majority of our residents, who are primarily low income families, to subsidise private landlords, which our board considered to be at odds with our charitable mission.”

Cllr Claire Kober, leader of Haringey Council, warned that the borough’s taxpayers could end up footing the bill.

She said: “We’ve been clear that the cap fails to address the root cause of the escalating housing benefits bill – the vast lack of affordable quality housing in London.”