By Kieran Wells (BSc Politics And Economics)
Winter is coming. This may be a popular TV catchphrase, but for the 4,677 estimated rough sleepers on any one night in England last year, winter brings genuine fear. However, as shown in the chart below, homelessness is much more than just rough sleeping. This is just the tip of the iceberg. Shelter England estimated that on any given night in 2019, 280,517 people were classified as homeless, an increase of 23,000 since 2016 and equivalent to one in every 200 people, although the true figure is almost certainly higher. This has led to charities such as Shelter, plus the UK national charity for homeless people, Crisis, to call on the government to act.
Explaining homelessness
But what explains homelessness in England? There can be a variety of reasons for homelessness, but the majority of them fall into one of two categories: individual reasons- losing a job, relationship breakdown, mental health- or structural reasons- lack of affordable/social housing, poverty, unemployment. These two reasons are interconnected, and together create a climate whereby homelessness persists: structural factors create conditions within which homelessness is likely to occur, and people with personal problems which leave them at risk of homelessness are more vulnerable to being affected by these adverse conditions.
A survey from Crisis of 984 people experiencing homelessness exposed the root causes in England: over one-third of rough sleepers stated loss of employment and mental health reasons, whilst over a half of people renting privately said mounting financial pressures pushed them into homelessness. Looking deeper at the second point brings some interesting discoveries. A report from the Office For National Statistics on affordable housing found that from April 2008 to March 2018, the average number of affordable homes delivered each year in England was 50,800; not only a ‘slight decrease’ in the long-term trend, but roughly 40,000 fewer than what Crisis suggest is required. Moreover, as shown in Figure 2, the number of homes available for social rent has fallen drastically since the 1980’s, halving since the turn of the century. This is predominantly due to the Right to Buy (1980) introduced by the Thatcher government, giving tenants the ability to buy their council houses at below market rates, subsequently moving them into the private sector. This policy represents the capitalisation of the social housing market: former council homes moved into the private housing market, therefore now susceptible to market forces- usually continuous price rises. This in turn crowds-out a portion of the social housing market, whereby high demand is now met with reducing supply.
Despite the number of homes in the private rental sector increasing exponentially this century, mean private weekly rent in England has also increased steadily over the past ten years (Figure 3). It is therefore no surprise why so many people are suffering; forced into the inflated private rental sector because of the shortage of the cheapest forms of housing. Rent and other associated housing costs pile-up, driving some on a one-way street with only one destination: homelessness. The evidence therefore suggests the provision (or lack thereof) of affordable housing as the predominant driver behind current homelessness in England.
But why should we care? As citizens we have a duty of care to look out for the most vulnerable, many of whom are categorised as homeless, with the number on the rise. Since 2010, there has been a 169% rise in rough sleeping, plus a 56% rise in families in temporary accommodation. 77% of households in temporary accommodation have children, this represents some of the most vulnerable groups living in insecure, dangerous and unreliable places. Strikingly however, the life expectancy of a homeless person is just 47 years- dwarfed by 81 years of the general population. If these are not a reason to care I’m not sure what is.
Besides the above moral reasons, there are also additional adverse economic consequences of homelessness. In 2012 the Department for Communities and Local Government estimated the cost of preventing and dealing with homelessness in England was up to £1 billion a year, including grants paid to individuals and expenditure to local authorities to provide temporary accommodation. However this doesn’t include indirect costs, such as health care and criminal justice costs, both of which are positively associated with homelessness. It is therefore clear homelessness doesn’t solely come with social consequences, but economic consequences also.
What has the government done?
In response to rising homelessness in the previous decade, the government introduced the Homelessness Reduction Act (HRA) 2017. Based on work from the charity Crisis, it places new duties on housing authorities to intervene earlier to prevent homelessness, focusing not just on those with priority need, but on all eligible applicants. The HRA was introduced primarily to assist individuals threatened with homelessness and who had previously received a lack of meaningful advice and assistance, whilst introducing two statutory duties: Prevention and Relief Duty. The first requires local authorities to take reasonable steps to prevent homelessness for any eligible applicant. Relief duty, on the other hand, is intended for those already homeless and aims to support them for 56 days to help them secure accommodation.
Despite the HRA only coming into force in April 2018, it is still necessary to evaluate its effectiveness by weighing up the various costs and benefits associated with it. By aiming to intervene earlier, the HRA would ideally reduce both the human and financial cost of homelessness by being proactive rather than reactive in tackling the issue, which should lead to a fall in homeless numbers. Moreover, the same survey by Crisis mentioned previously revealed that more people are now getting access to the help they need, whilst the legislation ‘significantly expanded access to homelessness assistance, particularly for single people’. Finally, a crucial yet somewhat under-appreciated aspect of the HRA is the mental impact it’s seemingly having on the homeless: 75% of the respondents in Crisis’ survey stated their local housing team ‘treated them with respect’. This undoubtedly would have a positive impact on the mental well-being of those who may often feel embarrassed about approaching authorities for help, and should not be overlooked.
However, homelessness in England is still extremely high and structural imperfections seemingly limit the effectiveness of the HRA. According to Crisis, despite many councils’ best efforts, ‘dwindling housing supply and rising rents outstripping wages and benefits means they have little to no housing available for more and more people’. This led to many homeless people reporting the only support they received from councils was information on how to rent privately, with only 39% of respondents agreeing their local authority had helped to resolve their housing issue. Clearly this is far too low and suggests that despite government intervention at the individual level, action needs to be taken against the structural issues of affordable housing provision and rising rent costs in order to effectively and sustainably tackle homelessness.
Looking Forward
From above it’s clear that additional interventions need to be introduced, focusing on the structural issues at the root cause of England’s homelessness issues that are constraining the HRA, such as the housing market and welfare system.
Perhaps the most pressing issue is the lack of social homes, with the need for the government to allocate an increased share of the funding for new housing provision towards homes for social rent, which have previous been depleted as Figure 2 indicates. But why is a greater provision of social homes beneficial in tackling homelessness? Because the decline in social home stock has forced some of the poorest households to rent privately, they have no choice but to spend most of their disposable income on housing. However, often they are left in poor quality accommodation due to the UK’s weakly regulated private rental market, where repeatedly landlords are exploitative of vulnerable tenants. This has adverse effects on life quality and well-being, reducing the chances of obtaining better quality homes in the future, leaving them close to the breadline and exposed to the threat of homelessness. This is no means to an end. On the other hand, if these households could live in secure accommodation (i.e. social housing) they then have a foundation upon which they can work, earn an income and contribute to the economy, without being constrained by the high costs of private rent. This way, therefore, an increase in social housing would provide a sustainable means to significantly reduce homelessness.
That is not all, however. There is also reasoning as to why an increase in social housing could be beneficial economically. The growing private rental sector has resulted in a massive increase in housing benefits, with many households failing to meet their inflated rents. Social housing expert John Boughton backed this up, stating housing benefit payments rose £4.3 billion from 2009/10 to 2014/15. Moreover, the real estate company Savills, estimated that in 2018 £431 million would be saved annually if these households were paying the more affordable social rent. Simply put, the higher the government subsidy to support social housing, the lower the annual housing benefit bill. The lack of social housing is not only costly for households, but the government too. Surely then, the government should look to the greater provision of social homes to reverse the effects of unaffordable housing caused by the private sector. Both socially and economically, this makes sense.
Homelessness in England is rising, and despite recent significant legislation giving local authorities greater power to intervene and prevent, this has not translated to the figures. The shift within the UK since the 1980’s away from government intervention, and towards a free-market economy has undoubtedly brought countless benefits and competitive advantages. However, it has also arguably gone a step too far regarding social housing. The decline in the volume of social homes is most certainly a contributing factor to rising homelessness, thus must be the starting point when discussing what can be done to eradicate homelessness.
Banner Photo by Andreea Popa on Unsplash
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