Two landlords have dismissed arguments made by the city’s MPs in the row over a £1 million hotel bill to put up homeless families.
The landlords, who both rent properties in Peterborough, agree with the city council that new government rules are to blame for a rise in homelessness which has forced the authority to house families in a Travelodge.
Council officers have blamed the roll-out of Universal Credit (the merging of benefits into one payment) and tax changes for landlords for more people losing their homes - stating that many landlords are not accepting people on housing benefit - but this has been called misleading by the Government.
Under Universal Credit housing benefit is paid directly to tenants rather than the landlords.
Peterborough MP Stewart Jackson and North West Cambridgeshire MP Shailesh Vara have both disagreed with the council’s criticisms of the Government. Mr Jackson told the authority it needed to work harder to deliver more affordable homes, while Mr Vara said he was not convinced that landlords were not taking on people in receipt of housing benefit.
However, landlord Azar Hussain has sided with the council which is expecting to overspend by £1.2 million due to putting homeless families in a Travelodge.
He said: “I think Adrian Chapman (the council’s services director for adult services) is correct when he says there are a lot of landlords who will not consider taking on housing benefit tenants.
“I myself, a private landlord who has previously taken on tenants on housing benefit, cannot see myself doing this in the future, especially if the system makes it even harder to get direct payments instead of going to tenants first.
“A landlord has to set aside a lot more time for benefit tenants compared with working tenants. Time is not always available, especially if the landlord also has a full-time job elsewhere (as I do).”
On tax changes, Mr Hussain said: “Mr Chapman is also correct in saying that there are many landlords now who are choosing to sell up as a result of new tax regulations that have recently come into force.
“The 10 per cent wear and tear allowance has been stripped away by HMRC, resulting in higher tax bills for landlords. Interest relief is also being axed for landlords by HMRC.
“This is a major blow to landlords and could see many landlords making a big loss compared to profits in previous years. Landlords also now pay a further three per cent in stamp duty when purchasing residential properties. You can see why some landlords are just giving up as it is not economically sustainable being in the game anymore.”
Mr Hussain also criticised the council’s selective licensing scheme, which requires landlords in some areas of the city to pay for a licence and adhere to a set of regulations.
He said many of the regulations were already in law and that this was just another tax on good landlords, while the slum landlords remain under the radar.
He added: “You can therefore see why many landlords are just saying enough is enough and deciding to sell up. All these factors put together are obviously putting pressure on the city’s homelessness situation.”
James Fraser, leader of the Conservatives on Stevenage Borough Council, rents out a property in Peterborough, and he said the council is “entirely correct” in its assessment.
He also claimed Section 24 of the 2015 Finance Bill, which comes into force next year, could see landlords pay tax in excess of 100 per cent of their earnings and pay tax when they make a loss.
He said: “This is being forced on us by a government which has produced bad tax policy and now does not wish to take any responsibility for it.”
Mr Fraser, who said he runs landlord accreditation schemes for Peterborough City Council, also said the MPs were at best “wilfully ignorant” of the effects of the Government’s policies.
Council leader John Holdich, a Conservative like the MPs, has also disagreed with Mr Jackson. He said: “One of these days our MP will accept some responsibility for the actions of his government which led to unintended consequences.”
Mr Jackson has since fired back on Twitter, accusing Cllr Holdich of misleading the media to “hide his own shambolic record,” and describing him as a “pretty useless” leader.
He added: “I’m not sure I’m that keen to take lectures from the guy who’s presided over the worst primary school results in England.”