Homelessness – its not about building more houses its about funding and welfare!

There are those who misuse the homelessness figures to support house building. Homelessness is a tragedy for those involved and a poor reflection on our society.

The following quote is typical – Britain’s housing crisis will get much worse in the coming years unless building levels increase rapidly, according to Dame Kate Barker, an influential economist and former Bank of England policymaker. The UK has been building too few homes for years, forcing young people to live with their parents for longer, and pulling vacant homes back into use. But those sources of relief in the market are fast running out, and if building rates do not improve then homelessness will be the result, she warned.


The National Audit Office has analysed the causes of homelessness in a report. The following extracts are from the report.

The ending of private sector tenancies has overtaken all other causes to become the biggest single driver of statutory homelessness in England. The proportion of households accepted as homeless by local authorities due to the end of an assured shorthold tenancy increased from 11% during 2009-10 to 32% during 2016‑17. The proportion in London increased during the same period from 10% to 39%. Across England, the ending of private sector tenancies accounts for 74% of the growth in households who qualify for temporary accommodation since 2009-10. Before this increase, homelessness was driven by other causes. These included more personal factors, such as relationship breakdown and parents no longer being willing or able to house children in their own homes. The end of an assured shorthold tenancy is the defining characteristic of the increase in homelessness that has occurred since 2010.

The affordability of tenancies is likely to have contributed to the increase in homelessness. Since 2010, the cost of private rented accommodation has increased three times faster than earnings across England. In London, the increase was eight times, with private rents rising by 24% and average earnings increasing by 3%. Homelessness tends to be higher in places where private rents have increased most since 2012-13.
Changes to Local Housing Allowance are likely to have contributed to the affordability of tenancies for those on benefits, and are an element of the increase in homelessness. Since 2011, the Department for Work & Pensions has introduced a series of welfare reforms, including capping and freezing Local Housing Allowance. These reforms have been designed to reduce overall welfare spending and to provide incentives for benefit recipients to take up employment. They have reduced the amount of household income that it is possible to derive from benefits where the Local Housing Allowance applies. At the same time, rents in the private rented sector in much of the country — London in particular — have increased faster than wage growth. All of these factors appear to have contributed to private rented properties becoming less affordable, which in turn is likely to be contributing to homelessness caused by the ending of an assured shorthold tenancy.

The government has not fully assessed the impact of its welfare reforms on homelessness. In our 2012 report Managing the impact of Housing Benefit reform, we found that the Department for Work & Pensions’ assessment of the impact of its housing benefit reforms did not reflect their potential full scale, including an increase in homelessness.1 Subsequent research commissioned by the Department for Work & Pensions in 2012 on the impact of housing benefit reforms on homelessness did not establish how many of these households would have been homeless if the reforms had not been introduced. The Department for Work & Pensions has not carried out any more recent analysis, despite the introduction of a series of further welfare reforms since late 2012.

Homelessness, HC 308 SESSION 2017–2019 13 SEPTEMBER 2017.


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