Industry News


Councils charged £1 billion for temporary accommodation


billion for temporary accommodation provided for homeless households. Research by The Guardian newspaper and the


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housing charity Shelter found that English councils spent £997m on temporary accommodation in 2017/18, a 71 per cent increase on the £584m spent in 2012/13. The number of homeless households in TA has


risen by 47 per cent over the same period, showing that costs are rising faster. Currently there are over 83,000 families in temporary accommodation across England, up from 55,840 in June 2013. Temporary accommodation for homeless


households is typically provided in hostels, Bed & Breakfast hotels or in poorly maintained houses converted into multiple flats. The problem is worst in the capital. About 55,000 of London’s households are living


in temporary accommodation, with some councils spending as much as £200 per head of their local population on housing the homeless. Hackney spent the most per head of its


population (£208) on temporary accommodation, more than 10 times the national average of £18. There are 3,000 households living in temporary


accommodation in Hackney alone, with more than 13,000 households currently on the housing waiting list. The 32 councils in London all feature in the 45 highest spending councils in the country. Among the non-London councils to reach the


top 45 were Luton, at number 17 (£77 per resident), Brighton & Hove at number 18 (£76) and Milton Keynes at number 30 (£38). Manchester and Peterborough were the first areas outside of the South East to appear in the list at 33 (£30) and 40 (£22). Birmingham came in 42nd place, spending £20 per head on temporary accommodation.


SOARING COSTS Councillor Darren Rodwell, the London Councils executive member for housing and planning, said


ocal authorities are being “ripped off” by private landlords taking advantage of a housing shortage, by charging almost £1


the cost of securing suitable accommodation for homeless households was growing and the situation was unsustainable. “These figures show how local authorities and


taxpayers are being ripped off by failings in the national approach to this issue,” he said. “The Government needs to take action. It’s clear we can’t keep relying on increasingly expensive private- sector accommodation, so more must be done to boost provision of social housing.” Greg Beales, the campaign director of Shelter,


said: “Long queues of homeless families pleading with councils for help and a billion pounds spent on temporary accommodation are just some of the unwanted consequences of welfare cuts, rising rents and a failure to build social homes. “And this bill is getting even higher as landlords


charge desperate councils over the odds for some of the least suitable and worst places for homeless families to live, like emergency B&Bs. Not only are these incredibly expensive, but families are often forced to share bathrooms and kitchens with strangers, sleep in one cramped room or even share a bed, and children are left with nowhere to play.” The Minister for Housing and Homelessness,


Heather Wheeler, said: “Having somewhere to stay and a place to call home is vital in helping those who are homeless rebuild their lives, and we are determined to make this a reality. “Temporary accommodation acts as an


important safety net – ensuring that the most vulnerable have a roof over their heads until longer- term housing can be found. We’re providing more than £1.2bn to tackle all forms of homelessness, including funding for programmes such as the Private Rented Sector Access Fund, which will support more homeless families into long-term private rented accommodation.”


Tenants get far less Government subsidy than homeowners


Homeowners get a much bigger slice of Government help than renters, whether they are social or private tenants, according to a report published by the Chartered Institute of Housing. Contrary to widespread beliefs, an analysis of


Whitehall spending, taxation and regulation of the housing market has shown that homeowners are the most subsidised, followed by social housing tenants and then private landlords and renters. The study made a broad comparison of


Government intervention in the housing market, taking account of public spending on grants, loans and guarantees, as well as on tax reliefs, welfare benefits and regulatory mechanisms. The research was carried out by housing finance


experts Steve Wilcox, former Professor of Housing Policy at the University of York’s Centre for Housing Policy and Peter Williams, departmental fellow in land economy at the University of Cambridge and funded by UK Finance. It shows that the Government is directing about


£8 billion annually into private housing over the five years to 2020/21, with over half going specifically to support home ownership and the remainder being more broadly aimed at the private market.


In contrast, direct funding for new social housing


is less than £2 billion annually, although most of this is grant spending whereas much of the private market support is via loans or guarantees. Tax reliefs deliver a much bigger benefit to


homeowners than they do for private landlords. Net tax relief for owners was some £29 billion in 2016/17 (£10 billion paid in tax; £39 billion received in tax reliefs). In contrast private landlords paid net tax of at least £8 billion.


PRIVATE MARKET SUBSIDIES On the other hand, the benefit system aids tenants much more than homeowners, with about £15 billion annually going to social housing tenants and £8.5 billion to private renters. Although regulation in different forms constrains


both the homeowner market and private renting, the latter has a strong advantage in having access to interest-only mortgages whereas new home buyers have to navigate various restrictions on mortgage availability. Overall, the report ‘Dreams and reality?


Government finance, taxation and the private housing market’ concludes that home ownership is


the most ‘subsidised’ tenure, followed by social housing and then the private rented sector. CIH chief executive Terrie Alafat said: “This


report demonstrates just how much Government support is going to the private market, and to home- owners in particular. It takes a comprehensive look at the way the Government supports our housing system and we would urge ministers to do the same. “Currently just 21 per cent of Government


investment is going to affordable housing. Rebalancing this budget to support people on lower incomes who can’t afford to buy could make a big difference. It is vital that the Government supports councils and housing associations to build more homes for social rent.” The research, funded by trade body UK Finance


which represents about 250 banks and financial firms, builds on work the Chartered Institute of Housing has previously done to show how almost four-fifths of Government grants, loans and guarantees now go to support the private sector. Combining this with analysis of the net effect of the tax and benefits system shows the marked advantage homeowners have in terms of state support.


www.housingmmonline.co.uk | HMM February/March 2019 | 13


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