London parliamentarians told homelessness services ‘close to collapse’

London’s councillors and housing chiefs took their calls for action on homelessness in the capital to parliament this week, alongside tenant campaigners urging proposed private renting reforms to be speeded up.

On Monday, the All-Party Parliamentary Group for London heard from Newham Council housing needs chief Candida Thompson that homelessness services city-wide are “on the brink of collapse”, while Barking & Dagenham leader and London Councils housing spokesperson Darren Rodwell warned that the whole housing market in the capital, “sale and rental”, is broken.

That the claims were no exaggeration was highlighted by figures presented from recent research for London Councils, Trust for London, the pan-London Capital Letters agency, and the London Housing Directors’ Group.

London’s private rented sector was found to be under pressure, with rents soaring but the number of properties available for private rent down by 41 per cent since the pandemic. This “downward trajectory” was hitting the lower end of the market hardest – leaving fewer and fewer options for low-income households and for local councils seeking temporary accommodation for residents accepted as statutorily homeless.

And with just 2.3 per cent of advertised rentals now affordable to those relying on local housing allowance (LHA) benefits to cover their costs, that meant increasing numbers of homeless families placed in temporary accommodation including “bed and breakfast” in commercial hotels – a “jaw dropping” escalation, said Thompson, up 110 per cent over the past year in her borough, with “no sign these trends will be reversed”.

The government, now helping mortgage holders in arrears with a 12 month ban on repossessions, needs to put support in place for renters too, including pushing ahead with its Renters (Reform) Bill outlawing so-called “no fault” evictions, said Ben Twomey, director of the Generation Rent campaign group. Good landlords have “nothing to fear” from reform, he said. “It’s not too much to ask not to be chucked out for no reason.”

But landlords increasingly exiting the cheaper end of the market, including those letting much-needed homes to councils for homeless families, needed help too, the parliamentarians heard.

New regulation, increased costs, lower returns, and – most frequently cited by those interviewed for the research – the “anticipated abolition of no-fault eviction” were all encouraging landlords to pull out. That made a strong case, said report co-author Abigail Davies, from consultants Savills, for intervention to “smooth the landing” of the reform and keep supply flowing at the lower end of the market.

A strong theme from landlord surveys, the meeting heard, was also concern about “anti-landlord sentiment” attributed to governments at all levels and to the media, seen by some as a way of “shifting blame for the public sector’s own failure to provide enough affordable housing”.

The key recommendation from the boroughs remains an immediate hike in LHA rates up to the 30th percentile of current market rents, putting many more properties within the reach of poorer residents.

But further incentives for landlords to stay in business at the lower end of the market were also needed, the meeting heard. Those could include subsidising improvement works and licensing fees in return for long-term letting arrangements, mortgage interest and tax reliefs to encourage investment and stabilise the cheaper end of the market, new insurance products protecting against rent arrears and property damage, and a clearer approach to enforcement.

Time to pity the downtrodden landlord, as the old song goes? Not quite, but certainly time for a better understanding of what Davies said was a complex market. The trick, as the report says, is for “councils and national government can explore ways to smooth out risk and reward…without easing up on quality expectations or unreasonably underpinning landlord profit”. Meanwhile the second reading of the long-awaited Renters Reform Bill is not expected until the autumn.

Photograph by Daniel Kosky of London Councils. Twitter: Charles Wright and On London. If you value On London, become a supporter or a paid subscriber to publisher and editor Dave Hill’s Substack. Thanks.