Published: 26 Mar 2015 by Kate Webb

Every household who loses their home and turns to their council for help represents a tragedy. Homelessness has a profound impact on people’s lives and many parents will be aware that even the welcome help from the council could come at the price of being moved far away from the area they and their children know or placed in unsuitable and often intimidating shared Bed and Breakfast accommodation.

But, far from personal tragedies, such households tell the rest of us about the desperate state of the housing market in Britain. The latest homelessness statistics from the Department for Communities and Local Government reveal just how broken the housing market has become and issue a warning that we won’t reduce homelessness until we fix these structural flaws.

Private rented insecurity driving homelessness

Insecurity in the private rented sector is now directly behind three in ten statutory acceptances. This means that a household has been told to leave their home by the landlord, approached their council for help finding somewhere to live and the council has accepted they have a duty to rehouse them because they’re in priority need (normally because they have children), did not cause their own homelessness and are eligible for assistance.

This scenario is increasingly common: short term contracts of six or 12 months are still the standard offer by private landlords, meaning renters live in a state of perpetual insecurity. When rents are affordable and supply is good, the ending of one tenancy may be disruptive for a family but it does not have to leave them homeless. Increasingly, however, households are finding it impossible to find alternative, affordable accommodation and have no other choice but to turn to the council for assistance. First the council will try to “prevent and relieve” their homeless, often by putting them in touch with another private landlord. But where this isn’t possible and the council has “reason to believe” someone is homeless, the statutory homelessness legislation kicks in as a safety net for those with no other options.

The fact that this is happening more and more tells us the PRS isn’t working for families. Implementing Shelter’s proposal for long term stable rental contracts would go a long way towards tackling insecurity. Crucially it would mean that landlords couldn’t increase rents by an unaffordable amount or evict households in the hope of attracting new, wealthier tenants willing to pay more.

But we also need to address affordability. For families on housing benefit they may be unable to find a home that is within Local Housing Allowance limits or a landlord willing to let to people receiving financial top-ups. It’s no accident that homelessness driven by the loss of an AST began to increase in the wake of reductions to Local Housing Allowance.

That’s why Shelter is calling on the next government to review LHA rates to ensure households can afford to rent privately. This should include the need to relink LHA increases to actual rent inflation to ensure people can continue to access basic accommodation and don’t get priced out.

Lack of affordable supply further hits homeless families

It’s not just the increase in AST-driven acceptances that alerts us to the sorry state of the housing market. The number of households in TA continues to increase, including a huge increase in the number of families placed in Bed and Breakfasts. Over 2,000 families spent New Year’s eve 2014 in Bed and Breakfast accommodation, a 31% increase compared to the same date in 2013. And what’s worse is that 780 families had been there for six weeks or more, a 56 per cent increase compared to the same quarter in 2013. This is despite it being illegal to keep families in B&Bs for more than six weeks and increased pressure on local authorities to find better alternatives.

Are local authorities doing this because they don’t care about the law and the manifest negative impacts on children? Or is it because they’re suffering from the same affordability pressures and supply shortages as the households they’re trying to help? Temporary accommodation is often procured from private landlords or housing associations, often on a longer term lease, and effectively sub-let to the homeless household. But with rising rents and competition from other households, it becomes harder for landlords to strike agreements with private landlords. Again, welfare reform has acerbated the situation. Housing benefit that can be paid for TA has been frozen since 2011, despite rising rents. Moreover, since 2013 homeless families have been subject to the household benefit cap, even though they have no choice over their accommodation. Combined, this makes it harder for local authorities to use the private rented sector to house homeless families. As a result only 38% of TA is now leased from a private landlord or housing association, down from 60% five years previously. Amid a lack of alternatives, B&Bs become the emergency solution.

Fixing this means ensuring local authorities have the funds they need. The question of temporary accommodation funding was effectively put on ice prior to the roll out of Universal Credit. But with far fewer families on Universal Credit than expected, it’s time that the DWP reviewed the rates of HB payable to homeless families. Homeless families also need temporary respite from the overall benefit cap to ensure local authorities can actually carry out their legal duty to rehouse families. The power to fix some of the causes of homelessness lays frustratingly close at hand.