According to a government-commissioned study, 40% of Londonlandlords said they would stop renting properties to housing benefit tenants in the next year – compared with 33% nationally. Another 26% said they would reduce their lettings in London to housing benefit tenants – compared with 24% nationally.
London Councils, the body representing the capital's 33 local authorities, described the findings as "worrying". The research, Monitoring the impact of changes to the Local Housing Allowance system of housing benefit, was led by the Centre for Regional Economic and Social Research at Sheffield Hallam University.
Before the housing benefit reforms were put in place, there were warnings about how badly housing tenants in the capital would fare. London Councils last year calculated that between 82,000 and 133,000 London households would be unable to afford their homes after the reforms, with only 36% of London's housing affordable to those receiving benefit by 2016.
Local authorities said there was a shortage of affordable housing and London had relatively high rents. The result, shown in the study, was that landlords in London were more than three times more likely to evict tenants or not renew tenancy agreements (37%) than they were to lower rents (11%).
One in six – 17% – of London landlords said they would no longer let their property to housing benefit claimants as a direct result of the housing benefit reforms, compared with 9% nationally.
The government had made much of the study's investigation of whether the reforms incentivised work. More than half (54%) of the London tenants affected were trying to improve their employment position. About a third of tenants in the capital said they had looked for a job (compared with 27% nationally) and 20% looked for a better paid job (compared with 11% nationally).
Last week, Lord Freud, the welfare reform minister, said: "We have capped housing benefit so that people can no longer claim over £100,000 a year to live in large houses in expensive areas of London. This is the right and fair thing to do.
"This research gives us an early insight into what is really happening and it shows the many scare stories about the effects of housing benefit reform are simply not materialising."
The work was commissioned by the government and was carried out last autumn, several months after the measures had been introduced for new housing benefit claimants but before the impact was felt by existing claimants.
The survey showed that London tenants were doing everything they could to hold on to their homes. Families were cutting back on some essentials. The Sheffield Hallam study showed 38% of London housing benefit claimants spent less on household essentials – the figure was 42% nationally – such as heating and food.
Sir Steve Bullock, London Councils executive member for housing, said: "The report's findings are worrying, especially since it only covers the initial impact of the housing benefit cap. It provides independent analysis to support what London Councils and others have been saying for over the last year, concerning the impact of housing benefit changes on Londoners."
"Rents are much higher in London than in other parts of the country, and landlords are rightly worried about tenants who claim housing benefit being able to pay their rent. However, it seems far too many are evicting tenants or simply not renewing tenancy agreements and not working with tenants and councils to find a way forward.
"Landlords not reducing their rent will exacerbate the shortage of housing for those households who are working and on low incomes. We have already seen evictions in London and fear this will further escalate over the coming months."