Forced council sales – hampering local authorities’ fight against homelessness

Last week, we published research showing the Housing and Planning Bill could force the sale of 23,500 vacant council houses each year, with local authorities facing an average annual bill of £26m. In many places, these are modest homes that could be going to those in need of stable, affordable housing.  And as a result, councils doing their best to find homes for homeless households could find their hands increasingly tied. Our new analysis suggests that the hardest hit council, Birmingham, could find that the number of homeless households who they are no longer able to directly house may treble.

What impact?

Information on the potential consequences of funding the extension of Right to Buy with forced council sales has been scarce, with both the Public Accounts Committee  and the National Audit Office slamming the DCLG for its failure to publish a full impact assessment. In the absence of government figures, we’ve tried to estimate what forced sales could mean for homeless households.

Who needs housing?

Councils have a statutory duty to find homes for households accepted as homeless and in ‘priority need’ . Those that they can’t house end up in temporary accommodation (TA), including B&Bs and hostels,awaiting a more permanent home. Combining the number of households in TA and the number of additional households accepted as homeless in a year in each council area provides an estimate of the number of households they need to house.  We have used 2015 figures from DCLG.

Who could be left behind?

Assuming that councils will use their available properties to try and house as many of their homeless households as possible, the number of available homes minus the number of homeless households gives anestimate of those that the council can’t house directly and will have to try and find homes for elsewhere.

Of course whether the council can match people to houses will depend on things like the size of families and the size of properties, so in our analysis we have matched single homeless people to one-beds and homeless families to those with two or more bedrooms.

The findings are shocking. In Birmingham, the number of households that the council will no longer be able to house directly trebles as a result of forced sales – that’s an extra 1190 households each year. Bristol will find themselves with over double the number of households that they will need to find homes for (an increase of 370) and Greenwich an 82% increase (190 households).

Source: Shelter calculations
Source: Shelter calculations

What lies ahead?

These figures are of course illustrative but give a good idea what our previous findings really mean for homeless people and the councils desperately trying to help them.

If social rent council homes are not replaced on a like-for-like basis, local authorities will have even more families that they need to find homes for. The first port of call are housing association properties but this could become more difficult given the government’s raft of proposals for deregulation in exchange for them adopting the extension of Right to Buy to their tenants and their shifting focus of larger organisations to market rent and sale.

In addition, if the housing association stock that households are placed in instead of council homes have higher rents, the amount paid in housing benefit to those who need it could be much higher.

Of course, following change in the 2011 Localism Act, councils other option will be to place homeless families in private renting. This is often unstable, with a risk that households could once again become homeless when their tenancy comes to an end.

It’s also more expensive, meaning that councils could struggle to find cheap enough properties and again, that our benefit bill could swell. For this reason, the Public Accounts Committee has recommended that the DCLG should publish a full impact assessment, including the policy’s implications for the amount of housing benefit and universal credit future tenants will need.

Like-for-like can stop the worst

The government has repeatedly claimed that forcing councils to sell-off their more valuable homes will increase housing supply. For this to be the case, they need to listen to the House of Lords, who once more voted that the Secretary of State should consider letting councils keep enough money from sales to replace their homes like-for-like.

The amendment was valiantly tabled by Sir Bob Kerslake in the face of intense pressure to back down. This principled stance should cause the government to come to an agreement on a sensible compromise. They must act now to avoid unintended consequences that could deepen the misery of families for whom secure, affordable and decent homes seem even further out of reach.

  1. Some excellent figures yet the impact will be much much greater as the figures assume homeless presentations stay constant.

    YET come October when the overall benefit cap (OBC) is reduced from £26k to £20k in all bar London, homeless presentations will rocket as the OBC that currently affects 24,000 households will affect well over 200,000 households an hence homeless presentations will sky rocket.

    1. Avatar photo

      Hi Joe, yep, these are definitely meant to give a rough idea of what we can expect the impact of forced council sale to be. We’ve tried to make some reasonable assumptions to get to these figures but would echo the PAC’s call for the government to a release a robust impact assessment, including social and economic costs.

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