Who will house the poorest? Developments on homelessness in England

This week saw the publication of our sixth annual Homelessness Monitor report focusing on England. The core theme of this year’s report is ‘access to housing’ for homeless people and those at risk of homelessness. The picture emerging from our analysis is far from encouraging: social sector new build and lettings are at historically low levels, there is an ongoing shift towards so-called ‘affordable’ rental products which are in fact beyond the reach of those on the lowest incomes, and Local Housing Allowance limits are increasingly adrift of private rents. While the 2016 Autumn announcement of grant support for 40,000 affordable housing dwellings over the next four years is welcome, social landlords’ investment capacity will continue to be constrained by the 1% annual rent reduction policy, and it remains very much in doubt that the resulting homes will be in fact be accessible to the bulk of those at risk of homelessness.

The absolute shortage of genuinely affordable housing for low income households in large parts of the country continues to be intensified by welfare policy. The benefit cuts introduced in this decade, and those planned for coming years will cumulatively reduce the incomes of poor households in and out of work by some £25 billion a year by 2020/21. This is in a context where existing welfare cuts, economic trends and higher housing costs associated with the growth of private renting have already increased family poverty to record levels. Aside from frozen LHA rates, the stringent LHA restrictions for younger single people and the overall benefit cap are the welfare reform measures most widely vi

Suzanne Fitzpatrick

ewed as problematic. The homeless groups local authorities find most difficult to help with housing – single people under 35s and large families – render transparent these welfare reform impacts. Moreover, the overwhelming majority (89%) of local authorities are concerned that the roll out of Universal Credit will exacerbate homelessness, mainly because of the move away from direct payment of rent to landlords and the pressures placed on vulnerable people by online application processes.

From our research evidence it is clear that welfare reform has been making both private and social sector landlords more risk averse with regard to letting to households in receipt of benefit. One local authority representative neatly summarised the difficulties this could conjure up for councils seeking to discharge their homelessness duties:

“Where are people going to go where local authorities… don’t have any stock themselves… and the local [registered] providers… are using affordability assessments and are quite happy to refuse a tenancy on the grounds of affordability… with the problem around affordability for the PRS, with LHA rates, it’s really almost impossible to think where a lot of these people are going to go.” (LA key informant, 2016)

It is also evident that certain local authorities are using 2011 Localism Act powers to severely restrict access to their housing registers, excluding some statutory homeless households from eligibility, despite the highly questionable legality of this practice.[1] The mainstream housing options available to many local authority officers for discharge of the main homelessness duty are thus rapidly narrowing.

The position on supported accommodation is, if anything, even more alarming, with Supporting People services – and housing more generally – at the sharpest end of severe cuts in local government finance, executed in such a way as to hit poorer councils much harder than their wealthier counterparts. Consequently, the availability of suitable options for homeless people with complex needs, such as substance misuse or mental health problems, has diminished in many areas. While homelessness organisations have cautiously welcomed the recent decision to delay and mitigate the extension of LHA caps to supported housing tenants, significant concerns remain about the effects on this sector of the social housing rent reduction from April 2017.

At the same time, our evidence suggests that the shrinkage in floating support services available to help vulnerable people sustain mainstream accommodation has undermined (both private and social) landlord confidence about letting to these groups. In this extremely challenging climate, it is perhaps all the more remarkable that the evidence-based Housing First model of rapid reintegration into ordinary housing with wrap-around support for homeless people with the most complex needs seems at last to be gaining some political traction in England[2], albeit that our 2016 local authority survey indicates only a modest spread of this provision across the country as yet.  With both official estimates for England as a whole, and the more reliable data for London, painting a similar picture of a doubling in the levels of rough sleeping since 2010, the Government has recently announced new rough sleeping prevention and reduction funds. Although welcome, these will not compensate for severe cuts in mainstream revenue funding for housing support for single homeless people.

With this combination of high housing pressures, ongoing welfare cuts, and severely contracting support services continuing to bear down on the poorest and most vulnerable households, it is hardly surprising that two-thirds of local authorities in our survey reported increased homelessness service demand ‘footfall’ over the past year, with one-quarter experiencing a significant increase. While statutory acceptance levels have risen 6% over the past year, to stand 44% above their 2009/10 low point, our evidence confirms that ongoing administrative changes mean that these official statistics increasingly understate ‘homelessness expressed demand’.

The vast bulk of the recorded rise in statutory homelessness over recent years results from the sharply rising numbers made homeless from the private rented sector, with such cases having almost quadrupled over the period – from less than 5,000 to almost 18,000. As a proportion of all statutory homelessness acceptances, such cases have consequentially risen from 11% to 31% since 2009/10. Local authority testimony indicates that this is attributable to growing demand pressure on private rental markets combined with welfare reforms which have incentivised landlords to terminate the tenancies of these households in order to let to others at a higher rent.

Regional trends in homelessness have continued to be highly contrasting, with acceptances in the North of England in 2015/16 some 6% lower than in 2009/10 (the national low point), while they have more than doubled (up 103%) over the same time period in London. Concealed, sharing and overcrowded households remain heavily concentrated in the capital, with the ability of younger adults to form separate households dropping by a third in London since the early 1990s. However, there were also indications from our 2016 local authority survey results that rising homelessness pressures are now bearing down particularly hard on the South of England and, albeit to a lesser extent, the Midlands. This might suggest that some of the extreme pressure that has accumulated in London over recent years has begun to transfer beyond the capital’s borders. Certainly, displacement of this acute housing stress is evident in the continuing growth in the numbers of ‘out of area’ temporary accommodation placements by London Boroughs: now accounting for 28% of the national total, up from only 11% in 2010/11.

Within this wider picture it is also important to highlight the uniquely vulnerable position of younger single people who now face highly disproportionate risks of both poverty and homelessness. The Shared Accommodation Rate limits for single people aged under 35 have already had a marked impact in reducing (by some 40%) their access to the private rented sector, and there are now acute concerns regarding the imminent removal of automatic entitlement to the housing costs element in Universal Credit for 18 to 21 year-olds not subject to exemption. Key informants expected this measure to further compound youth homelessness, though much depends on the (yet to be announced) specific exemptions criteria. Anxiety about young people’s prospects is clear in this year’s local authority survey: two thirds of councils anticipate that it will be ‘much more difficult’ to help 18-21 year olds and 22-24 year olds access accommodation in the next 2-3 years, in a context where nearly half of local authorities report that it is already very difficult to house these age groups.

As we write this, The Homelessness Reduction Bill has literally just passed its final Parliamentary hurdle. While legislation can hardly be expected to ‘fix’ the major structural challenges facing local authorities and their partners in preventing and tackling homelessness, it was encouraging to hear from both statutory and voluntary sector key informants that the Bill represented a ‘workable’ compromise, deliverable even in today’s acutely adverse climate. Placing the prevention duty on a firmer statutory footing was widely felt to be an important ‘protective’ step as local budgets are squeezed ever tighter, especially in the poorest parts of the country, and there was significant support for extending meaningful support to single people. For such a significant piece of homelessness legislation, progressive in intent, to be enacted is something that few would have predicted even a year ago.

Looking ahead there are multiple causes for concern in other respects, with the ongoing impacts of austerity-driven welfare reforms not only depleting the incomes of households vulnerable to homelessness, but also undermining the ‘pro-poor’ local authority services on which so many rely. Set against this, there appears to have been some softening of the official stance on social and affordable housing detectable in the new Conservative Government’s decision, for example, to make the ‘Pay to Stay’ policy for council tenants voluntary for local authorities and to allow housing associations tenure flexibility in the deployment of the new investment grant. By the time of next year’s Homelessness Monitor the Homelessness Reduction Bill will be on the statute books, possibly even in force, and we should have more certainty about the future funding arrangements for both supported and temporary accommodation. It will also be interesting to consider whether the first elected city-region Mayors have made good on pledges to prioritise homelessness. We will also be somewhat further down the line in terms of the roll out of Universal Credit and, at a bigger scale, the Brexit negotiations with the remaining EU member states should be well underway and at least some of the implications beginning to emerge. It has never been more important to follow closely the impact of these major social, political and policy developments – both positive and negative – on some of society’s most vulnerable people.

The Homelessness Monitor will continue to track developments over the course of the current Conservative Government until 2020.

This blog is an abridged version of chapter 5 of The homelessness monitor: England 2017.

[1] Peaker, G. (2014) ‘Impossible Preference: Excluding the homeless from housing lists’ Nearly Legal blog, 28th January: https://nearlylegal.co.uk/2014/01/impossible-preference-excluding-the-homeless-from-housing-lists/

[2] Wall, T. (2017) ‘Javid will consider Housing First scheme’, Inside Housing, 13th March:  http://www.insidehousing.co.uk/javid-will-consider-housing-first-scheme/7019196.article