Temporary Accommodation in London: Causes, Consequences, and Solutions

Barbara Mettle-Olympio

London, one of the world’s most dynamic and populous cities, faces a significant housing crisis that has resulted in an alarming rise in the use of temporary accommodation. Temporary Accommodation (TA) refers to short-term housing provided by local authorities to individuals and families who are experiencing homelessness or are at immediate risk of homelessness. The provision of temporary accommodation is intended as an interim solution until permanent housing can be found. However, in London, the demand for TA has surged to unprecedented levels, and many families find themselves stuck for months or even years. This article explores some of the challenges of TA in London, examining its root causes, the social and economic consequences, and potential solutions to address this growing issue.

Understanding the scope of temporary accommodation

The use of TA in London has grown significantly over the past decade. As of March 2023, there were over 60,000 households living in TA, accounting for more than two-thirds of the total number across England. This figure includes around 85,000 children; equating to one child per class. To add complexity 10 per cent of these households had a member with a physical disability or ill health. The total number of households in TA represents a 40% increase compared to a decade earlier. The rising number of people in TA is a direct result of an acute shortage of affordable housing, coupled with a high rate of homelessness due to economic pressures, welfare reforms, and the impacts of the COVID-19 pandemic.

Local authorities in London are legally required under the Housing Act 1996 to provide temporary accommodation to eligible homeless households. However, the growing demand for such accommodation has strained local authority budgets and resources. In 2023-2024, London boroughs collectively spent more than £90 million per month on temporary accommodation, a figure that has been rising steadily each year. This level of expenditure is startling, unsustainable and diverts funding away from other essential public services.

Causes of the rising demand for temporary accommodation

Several factors contribute to the rising demand for temporary accommodation in London, reflecting broader issues within the housing market, socio-economic challenges, and policy shortcomings.

Lack of affordable housing
The most significant factor driving the use of temporary accommodation in London is the lack of affordable housing. Over the past two decades, house prices in London have skyrocketed, outpacing wage growth and making it increasingly difficult for low- and middle-income households to afford housing. The average house price in London is now over £550,000, nearly double the national average, making homeownership unattainable for many. At the same time, private rental costs have also increased, with the average monthly rent in London exceeding £2,000, compared to the national average of around £1,200.

The shortage of social housing further exacerbates the problem. Social housing stocks have dwindled due to a combination of factors, including the Right to Buy policy introduced in the 1980s, which allowed tenants to purchase their council homes at discounted rates, and a lack of new social housing construction. The result is a severe mismatch between supply and demand for affordable housing, pushing many low-income households into temporary accommodation when they cannot secure a long-term home.
Rising homelessness
Homelessness in London has been on the rise, driven by various socio-economic factors. A significant contributor is the shortage of affordable housing, which forces families and individuals into precarious living situations. In addition, welfare reforms, such as the introduction of Universal Credit and the benefits cap, have reduced the financial support available to low-income households, making it harder for them to afford rent. According to Crisis, London accounts for more than half of all rough sleepers in England, with over 8,000 people sleeping rough in 2023.

The COVID-19 pandemic has further exacerbated the issue by causing job losses and economic instability. Many households, especially those in low-paid or precarious employment, have found themselves unable to pay rent or meet mortgage repayments, leading to evictions and homelessness. The “Everyone In” initiative, launched by the government in March 2020 to provide emergency accommodation to rough sleepers during the pandemic, highlighted the scale of the issue but also strained local authority resources as they tried to find more sustainable housing solutions post-pandemic.
Policy and regulatory challenges
Housing policy and regulatory challenges have also contributed to the problem. Planning regulations and the high cost of land in London make it difficult to develop affordable housing at the scale required. Moreover, local authorities face limitations in their ability to build new social housing due to restrictive borrowing caps, limited funding, and complex planning processes. While recent reforms have aimed to relax some planning rules, the impact has been limited in addressing the fundamental shortage of affordable homes.

Additionally, the lack of coordination between local and central government has led to piecemeal approaches that fail to tackle the root causes of the housing crisis. The reliance on temporary accommodation as a stopgap measure has become entrenched, with insufficient focus on preventive measures and long-term solutions.

The impact of temporary accommodation

The reliance on temporary accommodation in London has significant social, economic, and psychological consequences for individuals, families, and society as a whole.

Impact on families and children
Living in temporary accommodation can be extremely destabilising for families, particularly for children. Temporary housing is often of poor quality and overcrowded, lacking basic facilities such as adequate cooking, bathing, or play areas. Many families are placed in hostels, bed and breakfasts, or converted office spaces that are not designed for long-term living. According to Shelter, over 60% of families in temporary accommodation in London are placed in such unsuitable conditions.

Children living in temporary accommodation are more likely to experience disruptions in their education due to frequent relocations and long commutes to school. They’re also at a higher risk of mental health issues, such as anxiety and depression, due to the instability and stress of their living situation. These children also have worse educational outcomes and lower levels of wellbeing compared to their peers.
Financial strain on local authorities
London boroughs are collectively spending around £90 million per month, or about £3 million daily, on temporary accommodation—a nearly 40% increase from the previous year. Local councils face financial strain as the government subsidy for these costs is frozen at 2011 levels, despite the substantial rise in accommodation expenses over the past 13 years. This funding gap exacerbates the financial strain on local authorities, already constrained by limited support, making it difficult to manage growing temporary housing needs effectively. The reliance on TA is not a cost-effective solution. It leads to a vicious cycle where local authorities are forced to allocate more resources to short-term measures rather than investing in long-term housing solutions. This financial strain limits the ability of councils to provide other essential services, such as education, social care, and public health.
Social and community impacts
The widespread use of TA also has broader social impacts. When families are placed in temporary housing outside of their local area, they are often uprooted from their support networks, schools, workplaces, and communities. This displacement can lead to social isolation, a breakdown of community ties, and a loss of social capital. For vulnerable individuals, such as the elderly, people with disabilities, and those with mental health issues, the lack of stable housing and support networks can have severe consequences for their wellbeing.

Moreover, the concentration of temporary accommodation in certain areas can strain local resources and create tensions within communities. Areas with high levels of TA may experience increased demand for services such as schools, healthcare, and social support, without a corresponding increase in funding or infrastructure.

How do we solve this crisis?

Addressing the issue of temporary accommodation in London requires a comprehensive and multi-pronged approach that tackles both the immediate needs of homeless households and the underlying causes of the housing crisis.

Increasing the supply of affordable housing
The most effective long-term solution to the TA crisis is to increase the supply of affordable housing in London. This can be achieved through direct government investment in building more social and affordable homes, with at least 90,000 needed annually to meet demand. Utilising surplus public land for housing development, as outlined in the King’s Speech, along with providing incentives to developers for affordable units can also help address shortages. Additionally, reforming planning laws to streamline approvals, increase density, and set mandatory affordable housing quotas could accelerate the construction of new homes.
Enhancing homelessness prevention strategies
Preventing homelessness is key to reducing the demand for TA. Local authorities should be empowered and funded to implement effective homelessness prevention strategies to strengthen housing support services, such as mediation and financial advice, to prevent homelessness early. Expanding rent support, increasing Local Housing Allowance rates, and reforming welfare policies can help households avoid eviction due to financial difficulties. Additionally, scaling up rapid rehousing models like Housing First, which provide immediate, permanent housing with support, offers a sustainable alternative to relying on TA solutions.
Improving the quality and management of temporary accommodation
While reducing the reliance on TA is crucial, improving the quality and management of such accommodation is also necessary to protect the wellbeing of those who need it. This includes setting and enforcing minimum standards for safety, space, and accessibility, increasing oversight and regulation to ensure compliance from providers, and providing adequate support for families to minimise disruptions in education, healthcare, and their search for permanent housing. These measures would ensure TA is safe, suitable, and better managed to meet residents’ needs.

Conclusion

The problem of TA in London is a symptom of a broader housing crisis characterised by a lack of affordable homes, rising homelessness, and policy shortcomings. The current reliance on TA is not only extremely costly and unsustainable but also has severe social, economic, and psychological consequences for individuals, families, and communities.

Addressing this issue requires a comprehensive approach that includes increasing the supply of affordable housing, enhancing homelessness prevention strategies, and improving the quality and management of TA. By prioritising these solutions and committing to long-term investment and reform, the government and local authorities can work together to provide stable, secure, and affordable housing for all Londoners, ultimately reducing the reliance on temporary accommodation and building a more inclusive and resilient capital.