Families in London are at the epicentre of the housing emergency

Families in London are at the epicentre of the housing emergency

This London Challenge Poverty Week, we’re taking a deeper look at why the housing emergency in London is so pronouncedand what can be done to help

The housing emergency in London is overwhelming. While it rages on with magnitude across the country, London is the epicentre of unaffordable and poor-quality housing. Everyday families in the capital are having to choose between paying their rent or putting food on the table.

Why the housing emergency is worse in London

The housing emergency in London has been further exacerbated by the COVID-19 pandemic as families have struggled even more to afford their rent and essential living costs due to reduced hours, furlough and job loss.

The welfare safety net has failed to provide enough support for these households. Although the eviction ban kept many families in their homes for the duration of the pandemic, a difficult economic and jobs recovery ahead of us means people will be facing mounting arrears, evictions and potential homelessness.

At the root of London’s housing emergency is a lack of truly affordable social homes, twinned with an inadequate welfare system. Over the last nine years, delivery of social housing in the capital fell from 11,374 to just 632 between 2011/12 and 2019/20.

Worse still, London has been losing more social rent homes through sales than it has been delivering.

This loss of social homes has meant there are not enough truly affordable homes available for low income households who need them and, as a result, they must turn to the expensive private rented sector. Between 2011 and 2021, private rents in London shot up by a quarter, and before the pandemic private renters in London on low incomes spent an enormous 58% of their income on their rent.

This, combined with a welfare safety net cut to the bone and low paid jobs, means that even with support or work, people are really struggling to keep their head above water.

The welfare safety net is not working, and the pandemic has only made it worse

Many people and families in London have lost work and needed housing benefit to see them through choppy waters.

The number of private renting households in London claiming housing benefit (Local Housing Allowance) to help pay their rent rose by 66% between February 2020 and May 2021. In some boroughs, a majority of private renters now rely on housing benefit, including Enfield where 75% of private renters receive housing support, Barking and Dagenham (62%) and Brent (56%). 

We already know that the Local Housing Allowance (LHA) rates, or housing support for private renters, is too low. And they have been frozen so will only get worse as years go on as rents continue to rise.

Already, LHA rates do not cover what they should in 64% of London for a modest three-bedroom home meaning that many families will be facing growing shortfalls between their rent and what they receive in housing support. If they don’t receive enough to cover the rent, they will have to try and make up with other limited income.

The arguably more pressing issue with the welfare safety net in London is the benefit cap. The benefit cap puts a limit on how much in benefits a family or a single person can receive in a year, if earning less than £617 per month. This is the same whether you live in a private rented home or a social home.

Living in London, that limit is £23,000 per year for a family and £15,410 per year for a single person without children. This means a family, regardless of size, will have to cover rent, bills, food, travel and all other essentials with just £1,916.67 per month. Considering the median rent for a privately rented two-bedroom home in London is £1,450 per month, families will struggle to make ends meet without accruing arrears and facing potential eviction and homelessness.

Family size isn’t properly considered. As above, the Department for Work and Penions do consider whether a single person is with or without children, but other than that they do not consider the number of children. Nor do they consider the cost of renting, which makes the benefit cap incredibly arbitrary and punitive to so many who live in areas with high housing costs such as London.

Seema’s story

Shelter sees many people through our services who are impacted by the benefit cap across London, many of whom are facing homelessness simply because they cannot afford to pay their rent.

In our London hub we supported Seema (not her real name) who claims Universal Credit and is a survivor of domestic abuse. Seema is self-employed and she cannot work during school holidays because she has to look after her three children who are all under 10 years old.

She privately rents a family home in Ealing for £1,600 pcm. When she can’t work, she is benefit capped and after the rent is paid, she is left with just £86 to live on for the month. She really struggles to keep up with the high gas and electricity bills, and she is reliant on local foodbanks to feed her children. This is having a huge impact on her health and wellbeing as she regularly is forced choose between paying the rent or feeding her children.

Is there anything we can do?

The ultimate answer is for the benefit cap to be scrapped and the LHA rates to be unfrozen so they stay in line with the actual cost of renting.

However, for those struggling right now and at risk of losing their homes, Discretionary Housing Payments (DHPs) may be available to help cover the shortfall between rent and housing benefit. DHPs are administered by the local authority and are time-limited payments awarded to applicants on a discretionary basis to help with rent or other housing costs.

They are an incredibly vital tool in the prevention of homelessness and can be a cost-effective measure to keep people in their settled home. Once households become homeless, local authorities can face much higher costs compared to the average DHP used to keep someone in their home.

The provision of homelessness services by a local authority costs an estimated £15,063 per homeless person per year, but the average DHP award in London in 2020/21 was £1,421.

Timely intervention through a DHP can be relatively low-cost but effective in preventing homelessness and helping people to stay in their settled home.

We know DHPs are a sticking plaster and local authorities do not receive anywhere near enough funding to truly plug the gaping hole in the welfare safety net. However, many people are still not accessing DHPs leaving them at risk of eviction.

We know that throughout London different local authorities are using DHPs in creative and holistic ways to prevent homelessness. In our London Hub we have supported thousands of people affected by these issues since the pandemic began. We have seen how local partnerships can provide the right advice, information and support that can make the difference for people who can receive a DHP to prevent eviction and homelessness.

As part of our London Hub’s anti-poverty priority work, we want to work out how to improve DHPs and hear about how they are effectively used across London. We’re keen to hear from local authorities on how they are applying DHP funding in creative ways to ensure that tenants do not lose the roof over their heads.

Please contact andrew_hansard@shelter.org.uk if you would like to share examples of DHP provision good practice.