Scene-setting for the day
Sue Coulson, Chief Executive, Capital Letters
London faces a growing homeless crisis. The private rented sector has surged since the lifting of the pandemic restrictions with market rents sky high and affordable housing contracting. Sue Coulson says we urgently need to reimagine the solutions to the problem of family homelessness.
Welcome to our first Capital Letters conference. Let me set the scene for our discussions today.
But first, I want to share an article from Singapore’s Straits Times from 1961, which I found recently while clearing my late father’s things. I have no idea why he kept it. Buried deep in the newspaper is this story entitled “London’s Homeless Parade Through the Streets”.
The paper was reporting on a scandal in London, as two Anglican bishops led a protest by 2000 people, some of whom had been living in relief hostels set up by London County Council. Sixty years on, I find it shocking that we are still facing the same challenges.
How can we solve family homelessness?
So our conference will consider one very big question – how to solve family homelessness in London. We are bringing together people with the same objectives but who may never have met before.
We know London has a growing homelessness crisis. Demand is outstripping supply both for purchase and for rent. Affordable housing is contracting following the eviction pause, and our member boroughs are seeing far more family homelessness.
The cost of living increase is starting to bite, with a greater risk of homelessness for many more families.
We cannot continue to do what we’ve always done and expect that we will solve homelessness. Housing is a complex system with many moving parts. When one part of the system doesn’t work, it has unintended consequences with detrimental impacts elsewhere.
We have two major challenges – the lack of housing supply and affordability.
There are currently just under 300,000 people on housing waiting lists across London. Most will never achieve their aim to get social housing. And in 2021, there were 60,000 families and around 90,000 children in temporary accommodation in London.
The Mayor of London has an affordable housing program to build just under 30,000 affordable homes by 2028. He completed 10,000 homes in 2021/22, which is brilliant but not enough.
Rents ramping up in London
The average rent for new lets has increased by 15.7% over the last 12 months, which Hamptons say is the fastest growth since their index started in 2012. We’ve seen a resurgence of people coming back to London following the pandemic. As a result, landlords can receive hundreds of applications for each rental property.
Consequently, many of our member councils are reluctantly returning to insecure accommodation to house families, despite their huge efforts in recent times to reduce their use of temporary accommodation.
The positive impact of the increase of LHA rates in March 2020 is very visible. This narrowed the gap between market rent and high rent properties and made them affordable whilst also attractive to landlords.
Properties were available at affordable rents when landlords had no other options. Now they have lots of options, and the freezing of LHA rates immediately put a further 124,000 households at risk of homelessness, according to London Councils.
We know that the cost of living is impacting on people’s ability to pay rent. In 2020, London renters were spending 55% of their income on rent and bills, whilst the national average is around 35%.
LHA supply has collapsed
You will hear later from Savills that the pot of affordable homes for benefit-capped families shrank between February 21 and 2022 from 4% of the market to 0.1% of the market post-pandemic.
Families are trapped in temporary accommodation as they can’t afford rents, and TA has become the default social housing.
The system needs to change, and we have to commit to making it happen. I know that everyone in this room today is committed to making the system work better. But despite all our efforts, our individual impact is not enough.
Today we will consider how we can increase the supply of affordable homes whilst ensuring that landlords are part of the solution.