The LSE held a roundtable on Temporary Housing in London post the immediate ’Everyone In’ Crisis, in mid-July. This raised a number of issues that have come more to the fore over the last month – around numbers; the very different types of need; how the rental market – and therefore the availability of temporary accommodation – might be easing; and whether the emerging environment presents opportunities as well as challenges to local authorities. [1]
How many rough sleepers in London?
The first and most obvious issue was how many rough sleepers have been accommodated in London and where. The latest (May) figures from MHCLG showed 4,450 in emergency accommodation. Of these the GLA states that 1,200 were accommodated in GLA procured hotels across the capital. The rest are housed by the boroughs in immediately available accommodation -like properties awaiting regeneration, hotels across London and sometimes further afield or in the PRS. The result can be expensive and difficult to manage effectively.
The numbers in emergency accommodation in early August have declined somewhat but remain over 4,000 with around half of them still in hotels (although the GLA procured numbers are down to around 800). There is clearly a flow through the system in that more than 1,500 have been moved on into more suitable accommodation but there are also growing numbers now sleeping rough. There are also perverse incentives in this initiative – in that if you (as a single person) can get housed through the rough sleeping route, you will be moved on into temporary and ultimately settled accommodation; while if you go directly to the local authority’s homelessness service you may only receive advice.
So, contrary to its initial presentation this is not a one-off innovation BUT rather a process which will have to be managed into the longer term.
Two types of rough sleeper?
During the mad few days in March when Everyone In was introduced most of those accommodated were ‘traditional ‘rough sleepers with often massive additional support needs and an objection to available housing options. But nearly everyone did go in and it was a massive opportunity to change the minds and lives of many in this group. This is a longer –term issue and it is already clear that the funding available for support services is very much less (maybe £9 m) than for capital funding to provide accommodation over the next four years.
But even then, as is worryingly clear, over 50% of those accommodated in GLA procured hotels, had no recourse to public funds and were mainly people who had suddenly lost their job and/or their (often informal) accommodation and found themselves penniless. This group has grown over the last months and represents not so much a housing as an income/employment problem. Were they to be able to find work they would also almost certainly be able to find somewhere to live.
What about the homeless households in need of temporary accommodation?
At the end of 2019 nearly 60,000 households who had been accepted as homeless by London local authorities were in temporary accommodation – in other words more than 13 times the number of rough sleepers accommodated in March. But almost nothing has been said about this group and no additional funding has been made available to try to help them into settled accommodation.
There are two main issues related to the Covid-19 crisis: first, the numbers coming forward undoubtedly fell during the early days pandemic but it has also been very difficult to move on households into settled accommodation and there has been surprisingly little sign of illegal evictions (as opposed to loss of more informal arrangements). Secondly, there has been a longer term shift away from families to more single people with additional needs – who almost by definition are in competition with the rough sleepers who have now been promised move-on accommodation. Finally, there is very considerable fear that problems will get worse once evictions become legal again from August 23rd – although there will be a delay before the number rise significantly.
What is the Private Rented Sector going to look like?
This is probably the most important element in the current jigsaw. There are a number of reasons to think that the market will ease over the next few months – and maybe for years. First those operating short-term lets via Airbnb and its equivalents, which have eaten into the more traditional private rented sector, particularly in central areas, are likely to find it difficult to regain customers quickly. So these landlords may well be looking for new tenants. Secondly employment rates are almost certainly going to be lower, meaning less in-migration into London and less demand for private renting. In addition, there are large numbers of households talking of leaving London to live in the suburbs or further afield. Thirdly it is not yet clear what the student market will look like in the short or medium term or indeed what the demand from overseas buyers will be.
The other issue is what will happen to rents and returns. It would be normal for rents to move with wages – so if wages fall so too will rents. Ent holidays and issues around eviction may well have affected some landlords’ confidence. What is almost certainly the case, is that some landlords will want to leave the market (and can do so in a better market during the stamp duty holiday). But maybe these units will be bought up by other more professional landlords looking to expand their portfolios into the longer term.
Opportunities for local authorities?
Some boroughs are getting more enquiries from their landlords about the possibility of longer leases to provide temporary accommodation and so far at lower prices – so security may be winning over return at least in some contexts. Equally it might be easier to find settled accommodation that families can afford because of changes to the Local Housing Allowance limits. Further if the housing market turns down it may be possible for authorities to purchase new build properties at a discount – helped possibly by some of the capital funding being made available. But these are so far only glimmers on the horizon – the longer term position is entirely unclear.
In summary
The current situation is, of course, unpredictable – but there are opportunities as well as increasing challenges, notably rising unemployment and lower wages.
Our best estimates at this point suggest that:
- there may be fewer evictions than some are projecting – and therefore fewer people coming forward as homeless – because landlords face an uncertain market;
- equally there may be a larger supply of temporary accommodation at somewhat lower rents, as well as possibilities to purchase housing stock at a discount. However, the market is segmented and extremely uncertain at this stage;
- there are likely to be opportunities to increase the success of homelessness prevention and move-on. But boroughs need increased capacity and resources if they are to be able to take full advantage of these;
- and the traditional homeless, mainly families in temporary accommodation, hardly seem to be on the political agenda.
[1] This blog is an output from two projects being undertaken by LSE London in the context of the pandemic. One, funded by Trust for London looks at the costs and benefits of different approaches to addressing eviction issues in the private rented sector. The second funded by LSE involves working with London Councils to understand better the cost being incurred by London boroughs as a result of the ‘Everyone In’ initiative, and more generally how local authorities are addressing the challenges in providing homelessness services in the face of the pandemic.
