Tuesday, 03 March 2015

London councils forced to house families in B&Bs

Councils in the capital are being forced to house nearly 900 families with children in bed and breakfasts for more than six weeks, umbrella group London Councils has found.

The membership body has been meeting with officials from the Communities and Local Government department to try to bring private sector landlords back into the social housing market.

A London Councils survey of London housing directors found the number of private rented sector landlords willing to let to homeless people on benefits dropped by about 20 per cent in the last year.

It says that landlords are no longer renting to homeless people on benefits because of the high numbers of renters in work and rising rents. Tenants on benefits are seen as a less secure option, particularly with the imminent changes to the benefits system.

Sir Steve Bullock, London Councils’ executive member for housing, said: ‘While we need to address the long term housing shortage in London, we need to act now to tackle the acute housing crisis in the capital - primarily caused by the chronic shortage of temporary accommodation available for councils to place homeless Londoners.

‘While local authorities have been doing their very best to mitigate the impacts, we need a concerted effort by central government departments and councils to take action to ensure a supply of good quality, affordable homes in the private rented sector.

‘Londoners deserve to have safe, affordable and secure places to live. We hope to work alongside the government to make this a reality.’

Councils often rely on PRS accommodation for temporary housing but with the lack of these types of properties are having to rely on B&Bs. The government guidance is families should not be housed in B&Bs for more than six weeks.

London Councils and CLG have been discussing various measures to bring PRS landlords back to the market. These include tax relief for landlords, improvements to government schemes to bring private empty homes back into use and better joint working between central and local government.

The umbrella body also calls for the Department for Work and Pensions to work alongside CLG to address the issue of lack of private rented sector homes.

Readers' comments (6)

  • When Universal Credit comes in and the LHA is paid directly to the tenants (utter madness), there will be very few landlords willing to take on these tenants.

    There will be a nationwide mass demand for B+B's and hostels which will cost us taxpayers even more money.

    If anyone has any influence please tap the shoulder of Lord Freud and Ian Duncan Smith, otherwise I can see a new chain of 1/2 star hotels springing up which we will be paying for......

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  • Joe Halewood

    Gary - 82% of LHA is already paid direct to tenants and only 18% paid directly to private landlords - a point Prisk made this week before the select committee.

    A freeze on LHA in 2012/13 and an average 0.59% increase in LHA in 2013/14 is a far bigger reason why PRS landlords will flee the LHA market as less of less of the rent - which rose 3% last year - is being paid by LHA

    I agree on the B&B hotels point though 1 and 2 star is paying these places too high a compliment and yes more importantly it will cost the taxpayer and public purse more.

    On another matter - Can anyone tell me why a shortage of temporary accommodation means getting more PRS B&B hotels? Why can't councils provide more homeless families units?

    Why not incentivise councils or other social landlords to bring such TA properties to the market? At least then the costs wont see councils being held over a barrel!

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  • Chris

    Only addressing affordability and availability of housing will such issues be met. Yet no parliamentarian has any policy to do so. The continued focus on defending the bankrupting policy of funding housing through HB remains the barrier to recovering common sense solutions, and improving lives, as well as freeing up millions of people from benefit dependency and restoring their previous levels of disposable incomes that can fuel economic growth.

    Meanwhile, the blinkered remain in charge, and the financial sector remains the beneficiaries of the largest ever government debt burden growing ever bigger.

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  • The advantage of letting to councils for private landlords is that they don't have to rely on the vagaries of tenants and LHA - the council pays the rent and can be relied on to do so.

    The problem is that councils are constrained by the subsidy arrangements - if they pay the landlord more than they can charge the homeless household by way of rent, then the full cost falls on the council tax. So at the moment the issue is simply that the overheated London rental market allows landlords to get a higher rent pretty reliably by letting on the open market to those not on benefits.

    This may change as the welfare reforms come in, but the overall benefit cap will apply to homeless households in temporary accommodation, and permissible rent levels for HB are linked to the LHA. The guarantee of payment that a council can provide is worth something to a landlord, and councils will pay over the odds if they have no choice and it is cheaper than bed and breakfast.

    Outside London there is no problem. In London there is such a housing shortage that landlords can spit in the face of the government and its welfare reforms. They don't need tenants on benefits.

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  • Joe, The reason why this figure is 82% is because the Social Landlords are included. From October (then rolling forward) even they will have to suffer with the PSL's.

    My hotel comment was 1/2 (half a star) and not 1 or 2 star !

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  • On the sidelines

    lets go the whole hog and bring back workhouses

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