I'm faily certain they're not gypsies, they are usually not at all associated with any sort of system, especially a council system. It makes me wonder if the gyspy thing was thrown in there to added fuel to the fire...

Anyway, they can be booted out. Anti-Social Behaviour is a huge offense, and if they have enough complaints they can be pulled out by the judiciary system, assuming you go through the right channels - the council usually gets dragged into it whether they like it or not. Why they need such a house is a mystery, and the bit about it being a hostel and that there have been accidents where the children have fallen down the stairs got me thinking... How many centuries of imbreeding have they gone through for them to not realise that they could move the living room/dining room upstairs?