London councils’ temporary accommodation ‘bankruptcy risk’ as landlords quit

London councils’ temporary accommodation ‘bankruptcy risk’ as landlords quit

0:05 AM, 28th February 2024, About 10 months ago 13

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New data from London Councils paints a grim picture of the capital’s homelessness crisis, revealing a shocking 40% increase in monthly spending on temporary accommodation for homeless households last year.

This translates to a staggering £90 million per month.

The report warns of a ‘critical danger’ to borough finances due to skyrocketing homelessness rates and a severe lack of affordable housing.

The situation is being made worse by private landlords quitting the temporary accommodation market, opting for higher returns from private tenants or selling their properties altogether.

The latest figures show a 56.5% rise in ‘notices to quit’ received by boroughs from landlords.

‘Homelessness has a devastating impact’

Cllr Darren Rodwell, London Councils’ executive member for regeneration, housing and planning, said: “Homelessness has a devastating impact on individuals and families, while also bringing massive and unsustainable costs to boroughs’ budgets.

“Boroughs work hard to house homeless Londoners. However, London’s ballooning temporary accommodation bill is a critical danger to boroughs’ financial stability.”

He added: “If things go on the way they are, it’s no exaggeration to say these enormous costs pose a bankruptcy risk.

“We’re urging ministers to boost funding support for boroughs grappling with a worsening homelessness crisis.

“Ending the unfair cap on housing benefit subsidy rates for temporary accommodation would relieve much of the pressure on boroughs’ resources, helping us balance the books while providing homelessness support to everyone who needs it.”

Urging the government for increased support to help

Ahead of the upcoming budget, London Councils are urging the government for increased support to help boroughs manage these rising costs and avoid the need for a Section 114 notice, essentially declaring bankruptcy.

A key demand is lifting the ‘unfair’ cap on government funding that subsidises temporary accommodation costs, currently based on outdated 2011 benefit rates and failing to reflect current market realities.

The report further highlights the worsening situation:

  • The number of Londoners seeking homelessness support from their local boroughs rose by 14.5%
  • There as a 7% increase in the number of households placed in temporary accommodation
  • The number currently homeless and living in temporary accommodation is more than 175,000 Londoners – that’s 1 in 50 residents and includes an estimated 85,000 children.

The data shows that London accounts for more than half (57%) of England’s homeless households in temporary accommodation.

Homelessness crisis has been escalating for years

London’s homelessness crisis has been escalating for years, with the number of households in temporary accommodation almost doubling since 2010.

The Covid-19 pandemic, coupled with the rising cost of living and a turbulent private rented sector, has further exacerbated the issue.

With the current spending trajectory, London is on track to spend more than £1 billion every year on temporary accommodation.

While some government funding is available, it falls short, leaving boroughs facing a projected budget overspend of at least £150 million this year.


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TheMaluka

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10:32 AM, 28th February 2024, About 10 months ago

The more that authority attacks landlords the more I can charge for my rent. Tenants will have to have a solid gold financial background before they are even considered for a tenancy.

Mick Roberts

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10:59 AM, 28th February 2024, About 10 months ago

This will all be the Private Landlords fault then.

TJP

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12:32 PM, 28th February 2024, About 10 months ago

Time for Oscar nominations.
1) Michael Gove for his never-ending efforts to over-regulate the already over-regulated private sector out of existence.
2) Local Government for their unwavering insistence on bringing in all-but useless 'health and safety' requirements, solely with the aim of extracting fees from landlords.
3) HMRC/ Tory Government for introducing Income Tax on mortgage interest payments supplemented by increased Capital Gains Tax on sale of property and increased Inheritance Tax on transfer of property
4) The corrupt court system for their complete and utter failure to allow landlords to take possession of THEIR properties within a reasonable time frame,( I'm currently into my third year trying to repossess a 1 bed flat - Section 21 and Section 8. Hats off to Willesden County Court. Anarchy cannot be far away !!! Apparently the courts are deliberately chucking out repossession attempts at the request of government, solely to string out evictions!!
5) The entire Tory party for evolving from a conservative party to a socialist party.

TheMaluka

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13:19 PM, 28th February 2024, About 10 months ago

Reply to the comment left by TJP at 28/02/2024 - 12:32
An impossibly difficult choice but if I had to nominate one it would be Gove. Everything he touches turns to dust.

SirAA

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13:51 PM, 28th February 2024, About 10 months ago

Their enemies are within them.

Michael Booth

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15:23 PM, 28th February 2024, About 10 months ago

Simple answer to all this YOU REAP WHAT YOU SEW , GOVERMENT, COUNCILS HOMLESS CHARITIES ALL GUILTY OF DEMONISING LANDLORDS AND THE PRS IN GENERAL., UNTIL THEY WAKEUP AND SMELL THE COFFEE IT WILL I REPEAT IT WILL ONLY GET WORSE.

Cider Drinker

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16:01 PM, 28th February 2024, About 10 months ago

Those who work and pay taxes should be prioritised over those that choose not to.

Frank Jennings

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16:46 PM, 28th February 2024, About 10 months ago

It's like a slow motion train crash. You can see the red lights, you can hear the train's coming. You shout but nobody hears you, and then everything gets crushed into clouds of dust, with bits flying everywhere.
The conservatives wrecking the PRS, to win votes as they turn towards Marxism, and join the Woke lefties to form the Uniparty. They never wanted Brexit, so they hang on to the EU, blaming Brexit for all the woes. They can't wait to get us into the EU again.
I suppose the pendulum will swing in the right direction eventually, but it has a long way to go yet. Wait until the Left get into power at the next election, then we will see explosions, not just train crashes.
We still have the millions of boat people arriving, the arrival of CBDC's the clamping down of the PRS with the RRB, and even more tax, and more tax and more...

JB

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17:25 PM, 28th February 2024, About 10 months ago

Councils will go bust, council tax will rise, council assets will be sold off, council services will cease and then those owner occupiers sitting pretty, who are not landlords or tenants will wonder what on earth happened. TOO LATE the train has crashed

Cider Drinker

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18:22 PM, 28th February 2024, About 10 months ago

The Councils are not the landlords’ friends. They always act against the private landlord regardless of what is morally and potentially, legally right.

If landlords didn’t favour private tenants over the homeless population, where would the private tenants go? Would they themselves become homeless.

Why are so many people homeless in London? Couldn’t they be homeless somewhere a little cheaper?

The Conservatives and Labour before them have encouraged mass immigration to the U.K.

It shouldn’t come as any surprise that the housing stock is struggling to keep up with demand.

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