Fear and fury of tenants who say ‘pay to stay’ policy punishes them for working
Fear and fury of tenants who say ‘pay to stay’ policy punishes them for working
Saturday 13 February 2016 23.09 GMT Last modified on Saturday 13 February 2016 23.25 GMT The Observer’s story about plans to cap the amount households can earn before they must pay market rent for social housing triggered a huge response from readers
Susan, 36, and Stephen, 38, were born and brought up in Bermondsey, in south-east London. “Our families never worked and lived on benefits. We were the free-school-meal kids,” Susan says. “No school trips – because my mum and dad couldn’t afford them. Secondhand clothes. Steve and I were teenage sweethearts. We met 20 years ago and right from the start we’ve strived to do better; to give our children a different life.”
When she was 15, Susan had her first job, as a “Sunday supermarket till girl”. She is proud that since then she has never been without employment. Eventually she found a job in housing, attended every training scheme offered, and now earns £29,000 a year. Stephen runs the post room for a large organisation and has a salary of £27,000.
The family – with a daughter aged 10, and a son, 14 – live 20 minutes from their workplaces and the children’s schools, in a three-bedroom social housing maisonette that has been their home for eight years. They are near friends and relatives. They pay Southwark council £550 a month, while the local market rent is £1,700 a month. “We’ve still got lots of rungs on the ladder to climb in our careers and that was something to celebrate. We want to progress,” Susan says. “But now that’s all changed. One of us may have to cut back. It’s very scary.”
Steve and Susan’s combined income is £56,000 a year. For many people living outside the south-east, that might look like a high level of affluence, but factor in London’s housing costs and a harsh reality dawns. And that will become even more brutal if the government’s “pay-to-stay” scheme, part of the housing and planning bill currently going through the House of Lords, becomes law in April 2017.
Under the policy, announced in last year’s budget, families or individuals with a total income of £40,000 a year in London, and £30,000 outside the capital, will have to pay the rental market rate, with the increase going not to local councils but to the Treasury. Housing associations can voluntarily impose the cap, and retain the higher rents. Originally the cap was £100,000.
According to the London Tenants Federation, a family with an income of £40,000 paying an average market rent in London will be £11,963 worse off than if earning just less than £40,000. The chancellor, George Osborne, estimates that pay to stay will save the government £250m a year and affect 10% of social housing tenants.
Pat Turnbull, 68, a retired teacher, is chair of the tenants’ association on her estate in Hackney, where she has lived for 18 years. She and her partner of 33 years, Mick, have modest pensions that put them just above the £40,000 cap. Pat’s 35-year-old son also lives with them, as his salary doesn’t stretch to a London rent.
“Mick and I are on a fixed income. We don’t have the option to change jobs or reduce our hours to come under the cap,” Pat says. “If pay to stay is imposed, we could see our rent triple, which means half our income will be gone before we begin to meet bills for electricity, council tax, water. We are also assured tenants, which means that if we fall into rent arrears for longer than two months, we could be evicted.”
In the Observer last week, analysis of the impact of pay to stay by Savills estate agency for the Local Government Association triggered a huge response from readers. Savills found that 214,000 households would be hit by the policy across England. In London, most of the 27,000 households affected will be unable to afford to rent privately or to buy in the same area.
Camden is one of the London boroughs most affected by the change, with more than 2,000 families seeing a sharp increase in bills. “You could have a family of three or four on low-paid or part-time work who have to find another £15,000 a year for a two-bedroom flat if they reach the cap,” says Sarah Hayward, Labour leader of the council.
“Osborne says this will save money. I can’t see how. If people are asking for a pay cut or reducing their hours or deciding to give up work to stay under the cap, that’s not good for tax returns to the Treasury. Pay to stay needs scrapping.”
In 2010 David Cameron said: “We support social housing, we will protect it, and we respect our social tenants’ rights.”
On Thursday night, in Camden town hall, a packed meeting organised by Camden council to rally opposition to the housing bill appeared less than convinced by Cameron’s pledge. Opposition is growing in a number of London boroughs with tenants demanding that, if the bill becomes law, councillors should refuse to implement the measures.
“This is our poll tax,” said one speaker. At the meeting, resident after resident rose to speak angrily about the demise of social housing, the takeover of “our city” by “the rich and the overseas property developers”, and the plight of tenants’ children unable to live in areas where they were born and raised.
“Kath” came to London in her twenties with post-traumatic stress disorder, escaping a violent partner. Aged 64, she has lived in social housing for 34 years. Her twin daughters, aged 35, live with her. She works full-time and pays £700 a month in rent. She has never had sufficient money to buy her own home, nor the inclination. She believes in social housing as “a hand up, not a hand out”. When the children were small, she worked three jobs. Now she earns £35,000 in middle management but has a limited pension for when she retires. Her daughters, both law graduates, are in low-paid agency work, but the family income is more than £40,000.
Kath says her choice now is either to evict her daughters from her home or substantially reduce her hours, or stop working altogether – and that would have repercussions on her already small pension when she retires.
“My daughters grew up in Camden, they know people [in the area], and they have friends and connections. Why should they move out?” she says. “Why should I face life in private rented accommodation, growing progressively less able to pay rent, always on the move, progressively more isolated, when my life is here?”
This is “We Love Council Housing” weekend. On Saturday Kath was out on her estate, putting up posters for a “kill the bill” demonstration on 13 March.
A few decades ago, one in three people lived in council housing. Then it developed a stigma that only increases as social housing stock shrinks. Now eight properties are sold for every one built. But Kath says she, like many tenants, value having roots in a genuinely mixed community, the sense of security and belonging that comes from a secure tenancy (also due to be axed), and a family life that embraces the capacity to look out for one another, not least in providing a roof over a son or daughter’s head.
Eileen Short, of the campaigning group Defend Council Housing, points out that Aneurin Bevan intended that social housing should mean “the working man, the doctor and the clergyman will live in close proximity to each other”.
Carolyn Gelenter, 58, came from Australia to London in 1990, as a single mother with a young daughter. Her own mother, one of 10 children, had grown up in the East End. Carolyn lived on a tough social housing estate before moving to a two-bedroom flat where she paid social housing rent for 20 years. Six years ago, she downsized to a one-bedroom social housing flat in Bloomsbury, in central London. Carolyn now trains teachers and is a highly skilled speech and language therapist for children with special needs, working across three London boroughs. In recent years her income has risen to £55,000 a year.
Carolyn says she happily pays the higher rate of tax. She could have bought her flat 20 years ago, but declined to do so on principle.
“A friend bought her flat for half the going rate from the council and recently sold it for a huge profit,” she says. “I think that’s wrong.
“Should I have social housing? I’m incredibly grateful that I’m better off, but I can’t see how else I can afford a place to live. If I’m capped, I can’t pay the rent. Camden will have to sell the flat and a rich property developer will benefit. My alternative is to reduce my days from five to three, but that will impact on my pension and reduce the taxes I pay.
“Pay to stay – how does it help anyone that my life gets a whole lot worse and still people in need don’t get properly housed?”
In Bermondsey, Susan and Stephen discovered a week ago that, even with a government discount, they are still £30,000 short of enough money to acquire a mortgage on a starter home.
“We started out as cashiers in a supermarket,” Stephen says. “We might as well go back to that. At least then we could keep our home in a place that we belong. Now it feels as if we’re being punished just because we’ve tried so hard.”
Claudia Zylberstzajn, 42
Zylberstzajn, a self-employed mental health social worker, originally from Sierra Leone, moved to London in 1997, eventually settling in Kings Cross, an area that is undergoing major development and is the home of Eurostar and Google, among others. She lives with her husband, a journalist, and their child, paying a social rent of £700 a month for a two-bedroom house.
“We are the people who kept the area going when it was derelict and scary so that Google could move in,” Zylberstzajn says. “They should be paying us, not telling us we have to go. I live in an area where I have to travel to buy a latte that I can afford.”
The family income is £41,000, taking them over the £40,000 cap. The market rent is £2,200 or more. “We don’t know what’s going to happen with the bill, so we are living with a lot of insecurity and anxiety.
“We are the forgotten people in London. We can’t afford to buy and now they are telling us that we can’t afford to rent. But they need us to work. So, what are we to do?”I’m a Labour voter and I will always be a Labour voter but we are being forced to disappear from London, a Labour city.”
John Marais, 69
John is a retired library assistant, living in Cambridge. He worked for Trinity College, dealing at times with rare manuscripts. His wife, Sharon, died seven years ago, aged 50. She earned around £12,000 a year as a clerk. If she had lived, the combination of her salary and John’s pension would have put them above the £30,000 cap. John lives in a two-bedroom house and pays £420 a month. The market rent is a over £1,000 a month.
In 1979, when John and Sharon had a baby on the way, they were allocated a council two-bedroom maisonette, within a month of applying. The council had 14,000 properties. Now that stock has halved, as the city’s population has mushroomed. When pay to stay was announced, a government spokesman said: “It’s not fair that hard-working people are subsidising the lifestyles of those on higher-than-average incomes, to the tune of £3,500 a year.”
John says: “My council house was built in the 1950s, on council-owned land. The one previous tenant and myself have jointly paid far more in rent than its building cost and only a fraction of my current rent is needed for its management and maintenance, so in what way is my home subsidised?”
Pat Turnbull, 68
A retired teacher, Pat has lived on her estate in Hackney for 18 years. She and her partner Mick’s incomes put them just above the £40,000 cap. The couple live with Pat’s 35-year-old son, whose income does not cover rent in the capital. Pat is chair of the tenants’ association on her estate.
“I come from a family that has never owned property and I have no ambition to do so,” she says. “My father was a primary school teacher and he always had a school house. People say if you rent, it’s not your home but that’s not how I see it. It is my home. It’s where I want to stay. But the Housing Bill could make life very, very difficult for us and so many people.”
Carolyn Gelenter, 58
Carolyn lived on a housing estate before renting a social housing two-bedroom flat for 20 years; six years ago, she moved to a one-bedroom flat in Bloomsbury, central London. She trains teachers and is a speech therapist for children with special needs. She pays £650 a month rent while the market rent is £2,000. In recent years, her income has risen to £55,000 a year but she has not saved much because of needing to visit her mother in Australia. On Thursday after the council meeting, she cried. “I suddenly realised I really could end up in a bedsit – I could lose my home.”