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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

Poverty, housing costs and homelessness

19/12/2016


As the latest government figures on homelessness reveal the number of homeless people continues to rise, policy and practice officer Faye Greaves takes a closer look at the link between housing costs and poverty.

In the early 2000s we thought we’d found the answer to tackling homelessness. Building more affordable housing was recognised as a crucial element to achieving success but more importantly, priority was afforded to preventing people from becoming homeless in the first place.

Back then homelessness was highlighted as a manifestation of social exclusion and the government of the day worked on this premise, pulling out all the stops to reverse the huge numbers experienced in the peak of 2003 when there were 135,580 households accepted as being owed the full housing duty by their councils.

These efforts saw acceptances fall to a low of 41,790 in 2009 (calendar year) but they have since risen for six consecutive years to 57,750 in 2015 - that’s a 38 per cent increase in five years. And the latest official figures show that this rising trend shows no sign of reversing – the total figures for the first three quarters of 2016 are already 7 per cent higher than last year and according to Shelter, there will be 124,000 children in temporary accommodation this Christmas – a 17 per cent increase on 2015.

In 2003 the Labour government’s report into tackling homelessness 'More Than a Roof', advised with confidence that the likelihood of someone losing their home would be significantly reduced for people in employment. Supporting people into work was championed as a way of ensuring people were full and equal members of society; a route to social inclusion.

One of the beacons of our support offer across the sector at the minute is to help people into work; to increase financial resilience and maximise income to reduce dependence on an “over-generous” welfare system that does nothing to incentivise work. But targeting those who are socially excluded alone is no longer enough – homelessness is a possible reality for more and more of those who are included in society by way of employment.

The latest Joseph Rowntree Foundation (JRF) and New Policy Institute’s ‘Monitoring Poverty and Social Exclusion’ report has highlighted that the risk of poverty has increased for more and more people, including those in work, because they are handing over a higher proportion of income to cover their housing costs. 55 per cent of people in poverty in the UK are in working households - that’s one in eight workers, 7.4 million people - a “record high”.

The rise is being driven by the UK’s housing crisis, particularly high costs and insecurity in the private rented sector (PRS). The number of private renters living in poverty has doubled in a decade, from 2.2 million in 2004/5 to 4.5 million people in 2014/15 and the latest official homelessness statistics show that the ending of a private sector tenancy is now consistently by far the biggest single cause of homelessness, accounting for 32 per cent of total acceptances in the third quarter of 2016.

The number of in-work housing benefit claimants also continues to rise and the growing gap, between local housing allowance (LHA) rates paid to people renting in the PRS and actual market rents, is limiting recipients to a declining percentage of the market – the bottom 5 to 10 per cent in some areas. The risk of homelessness now extends beyond those who are ‘socially excluded’ to people in work, a group once notable for being less likely to experience it. I think we can safely say that this safety zone has been breached by our growing housing crisis.

So for what has now become an almost expected year-on-year increase in the number of people losing their homes, we need urgent action from Government to address the lack of genuinely affordable housing supply, rising PRS rents, low wages that fail to keep pace with rising living costs, and cuts to in-work benefits.

Anything that undermines the incentive to work should hopefully strike a chord with a Government that promises to help those who are ‘just about managing’. Poverty is being fuelled by our housing crisis and is increasing the risk of homelessness for more and more households, including those in work, so how long and how far does our homelessness problem have to reach before the obvious policy conflicts across departments are addressed?

Some positive moves were made in the Autumn Statement to address rough sleeping and tackle the shortage of affordable housing which remains one of the root causes of homelessness. And the Homelessness Reduction Bill’s progress through parliament also offers hope for the future.

But it is clear we still need a much more joined up, strategic effort from government to tackle what has now become a seemingly inevitable quarterly increase in England’s homelessness levels and in-work poverty must be given proper attention as part of this.

Further reading

How to support anti-poverty initiatives

 


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