Poor families to be sent out of London in housing crisis

A view of housing and the Olympic Stadium in Newham, east London (Daniel Lynch)

London's housing crisis is about to "burst wide open" according to experts, who say the actions of the Olympic borough of Newham, which tried to rehouse 500 of its poorest families hundreds of miles away in Stoke, is just the beginning.

Political sides lined up to defend or attack the Government yesterday over whether cuts to benefits and continued shortages in affordable housing were leading to "social cleansing" across the capital.

At the heart of the argument is mounting concern over the ability of Britain's largest city to build enough new homes at a time of stagnant economic growth, painful cuts and a continually expanding population.

In the first indication that London's housing crisis is threatening to spill out across Britain, Newham Council admitted yesterday that has been forced to try and look for accommodation hundreds of miles way. Council chiefs have written to 1,179 housing associations asking whether they would be prepared to take 500 families who can no longer stay in the borough because their rent is more expensive than the cap which the Government recently placed on housing benefit.

The lack of housing has since been exacerbated by caps to housing benefit which were brought in at the start of the year. The amount of money now available has been set at £250 per week for a one-bedroom property, £290 for two bedrooms, £340 for three bedrooms and £400 for four bedrooms. The maximum anyone can receive in a year is £21,000.

The London Councils think tank has warned that 82,000 households could lose their homes.

Downing Street's stance has been that it is unfair to allow those receiving housing benefits to expect to stay in central London when those who pay their way are pushed out of the capital. But critics say the new measures are a way of clearing poorer families out of central London. Karen Buck, Labour MP for Westminster north, said: "Unless rents drop sharply the dam will break and we will see more examples of boroughs requesting to move people across the country".

Yesterday Westminster Council insisted only 13 families have had to be rehoused outside of London.