London boroughs have warned of a fast-approaching summer wave of homelessness in the capital.
Councils point to a “triple whammy” of upcoming risks threatening to push homelessness pressures to record levels:
High unemployment and rent arrears
- Recent research from the LSE suggests 400,000 Londoners are in significant rent arrears as a result of Covid-19.
- The latest data for the three months ending March 2021 shows that London has the highest unemployment rate in the UK at 6.8%, compared to the UK average of 4.8%.
- Analysis commissioned by the cross-party London Councils group shows this could worsen further after the furlough scheme ends in September, with potentially one in ten Londoners (9.4%) unemployed by the end of the year.
Eviction ban lifting on 31 May
- The government’s temporary ban on evictions is due to end this month. While the ban has protected households in financial difficulty from being made homeless during the pandemic, no additional support has yet been provided to help private renters pay off their arrears.
- Boroughs anticipate a spike in renters facing eviction and turning to their local authority for help to avoid becoming homeless.
Uncertainty over homelessness funding
- Boroughs’ spending on homelessness and rough sleeping rose by £107 million last year (2020/21) due to Covid-19. In response to Covid-19 and the government’s ‘Everyone In’ directive, boroughs are providing emergency accommodation for 2,659 rough sleepers and together with the GLA have arranged ‘move on’ accommodation for more than 4,597 former rough sleepers since March 2020.
- Although the government provided emergency funding for supporting rough sleepers and covering these additional homelessness costs during the pandemic, there is little clarity over what funding will be available beyond June 2021. This undermines councils’ ability to plan service provision.
- Even before the pandemic, London Councils highlighted the unsustainable growth of homelessness costs in the capital. Boroughs spent £1.1 billion on homelessness services in 2019/20.
London faces the most severe homelessness crisis in the country. London Councils estimates there are currently 165,000 homeless Londoners living in borough-provided temporary accommodation, accounting for two-thirds of England’s homelessness total and more than the entire population of cities such as Norwich (143,000), Lancaster (146,000), or Oxford (152,400).
Almost 70% of London households in temporary accommodation have at least one child, with the most recent figures estimating 90,000 children in total.
Homelessness in London previously peaked in 2005, when there were 63,800 households in temporary accommodation. With 60,680 London households in temporary accommodation today, boroughs fear new records could be set this year unless the government increases investment in homelessness prevention.
Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said:
“Even though the Covid-19 situation is gradually improving, there’s a very real risk of London’s homelessness crisis getting even worse.
“In the coming months we can expect a triple whammy of continuing job losses in the capital, the imminent lifting of the evictions ban, and uncertainty over future funding levels for local homelessness services.
“Boroughs are doing everything we can to tackle homelessness in the capital, but ultimately we need the government to rethink its welfare policies and to boost long-term funding for local services if we’re to reverse these disastrous trends.”
London Councils is calling on the government to:
- Confirm both short-term and long-term funding arrangements. Boroughs need clarity over what government support will be available for Covid-related homelessness costs beyond June this year. They also need longer-term certainty over funding to meet London’s unsustainable homelessness pressures. London Councils is pushing for more investment in the government’s spending review due later this year.
- End the five-week wait for Universal Credit payments to begin; making sure Local Housing Allowance continues to match the cost of renting in London (in April 2020 as part of its response to the Covid-19 pandemic the government increased LHA rates to cover at least 30% of local private sector rents).
- Restore government funding for councils’ local welfare assistance schemes supporting residents in financial crisis (the government abolished its £178 million annual funding for local welfare assistance from 2015/16, forcing councils to finance this provision from their own general funds).
- Increase Discretionary Housing Payment funding to support households at risk of homelessness. National funding for these payments was reduced by 22% for 2021/22.
- Improve councils’ resources for building social housing. There are currently 243,000 London households on boroughs’ housing waiting lists. If the government confirmed social rent levels for the next ten years (as opposed to only four) and ended its restrictions on how councils can use Right to Buy sales receipts, boroughs would be in a stronger financial position to invest in new social homes for their communities.