Insights from Our Roundtable: Addressing Homelessness and Temporary Accommodation in the Housing Sector

Following on from Matt’s recent insight piece, we were thrilled to jointly host a webinar addressing a growing concern and recognition of the homelessness crisis across local government. Dino Christodoulou, Associate Director at Tile Hill, and Matt Gleeson, Consultant, led the session, accompanied by a brilliant panel including Hakeem Osinake - Strategic Director for Housing at the London Borough of Southwark, Emily Hill - Section 151 Officer for Ealing, and Elizabeth Cook - an Executive and Non-Executive Housing Director with 30 years of experience in local government.

Sharing their insights and experiences together, they navigated the challenges of homelessness and temporary accommodation in today’s housing sector.
We’ve highlighted some of the key takeaways below on how changes in the market are piling financial pressure on councils and some insights into how authorities are responding to this.

The scale of the problem
The rising costs of temporary accommodation are at an all-time high on many councils' agendas - jostling with social care for attention as serious in-year budget pressures.  In 2022/2023, this was estimated to have cost local government £1.7 billion, and all indications are that this will increase further this year.

“It tells you how bad things have got when councils are setting up financial recovery boards for housing budgets,” said Hakeem. “This is now getting the sort of attention previously reserved for the financial pressures faced in adult and children's social care services”.

“I always thought the housing issues are much more acute in the South than the North but actually it's a problem for urban areas across the country” said Elizabeth “ It's really a problem in urban areas across the country and there is huge variation - the key pressure being the gap between average rental costs and average income - and that can vary a lot across the country”.

Emily highlighted how the housing benefit subsidy available to local authorities to fund accommodation costs is fixed at a rate set in 2011 - over 13 years ago.  This “subsidy gap” is worth over £8m this year in Ealing alone.

What is causing the problem and how does it vary across the country?
The need to find and fund temporary accommodation is not new, but over the past 12 months the pressure increased massively because of a “perfect storm” of factors coming together.  Increasing interest rates and changes to tax rules have led to many private sector landlords choosing to sell up and leave the market. That has had a double whammy effect - tenants are being evicted through no fault of their own, who then can require help getting re-housed and it also reduces the pool of properties available to meet demand.

According to Hakeem you really need to research the underlying causes in specific localities.  In some areas housing authorities are also seeing increases in evictions by families and friends, something that can be much more difficult to address as statutory protections for tenants do not apply in these instances.

Both the demand for temporary accommodation is increasing, and the supply of temporary accommodation is shrinking. This gives rise to a cost pressure. The solutions that councils look to in the absence of a readily available supply of private sector housing are more expensive and being relied on more which is also serving to drive up cost.

Temporary accommodation in B&Bs is clearly not ideal for tenants but is also more expensive for Councils and that supply too is being outstripped by demand in some areas.  Councils have been renting hotels to create hostel accommodation but again, this is expensive and unsustainable.  Elizabeth and Emily each shared examples of bidding wars for such accommodation, often with the Home Office who are trying to secure these types of properties for other purposes, such as emergency accommodation for relocated asylum seekers.

How are local authorities responding to this challenge?
All our speakers agreed that whilst it's not going to be possible to build our way out of this, maintaining and expanding available housing stock has an important role to play. With many private sector landlords leaving the sector, there is increasing opportunity for councils to buy up that stock for their own use.

Whilst not a perfect solution, some are choosing to make use of voids in their own stock for temporary accommodation or indeed deliberately keeping voids available for this purpose.

Some councils are exploring ways to try and keep private sector landlords in the market - for instance by offering long term rental agreements so that the landlord has a greater guarantee of a sustained income.  But making tenancies sustainable also requires support for the tenants themselves.  Often there are other complexities associated with homelessness and so working with other providers such as health, social care or organisations like the Domestic Abuse Housing Alliance is essential.

Finally, numerous concerted efforts are underway to advocate for changes in the housing subsidy, aiming to address the reliance on a cap that remains at 2011 market levels. Organisations such as the District Council's Network and London Councils continue to actively lobby both the government and the opposition. If these efforts are successful, millions could be lifted off the very real financial pressures burdening many authorities.

According to Emily, “It remains to be seen whether this message will get through and if it does, whether any government judges that it can afford to put this right”.
 

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