The crisis in temporary accomodation: what can be done about it?

There is a crisis in temporary accommodation. Campbell Tickell Director, Maggie Rafalowicz, discusses the root causes and potential solutions.

Our country faces an unprecedented crisis in temporary accommodation (TA), with over 117,000 households and nearly 152,000 children currently living in TA. This situation severely impacts local authorities and the health and wellbeing of those housed this way.

Root causes

The crisis stems from multiple long-term factors. Housing costs have risen steadily while incomes have stagnated. Decades of housing policy decisions have compounded these issues, including insufficient affordable housing construction and the loss of over two million homes through Right to Buy since the 1980s, alongside a relative paucity of funding for new affordable homes.

Current delivery rates highlight the scale of the problem: around 41,000 affordable homes for rent were completed in 2022 to 2023. This equates to just 3% of households on local authority waiting lists so would take more than three decades to meet existing demand (not accounting for population growth, location, needs or sales).

Welfare reforms since 2010 have exacerbated the situation. The benefit cap has particularly affected large and single-parent families, while inadequate Local Housing Allowance (LHA) rates have made private sector housing unaffordable in most places. Recent estimates show just 2.3% of private rented homes in London and 8.5% nationally fall within LHA rates, creating a severe shortage of viable housing options.

Potential solutions

1. New housing development

Building more affordable homes, particularly for social rent, remains crucial. However, current challenges include high construction costs – in London, each new social/affordable home costs approximately £450,000 to deliver, with grants covering just 12%. Registered providers are scaling back development due to rising costs of major works, decarbonisation, and building safety requirements. Modern methods of construction and modular housing offer potential solutions, though modular has a mixed track record in this country including where used for TA.

2. Property acquisition

Local authorities can pursue immediate solutions through property acquisition, particularly during a climate of high interest rates/lower rental yields. Government initiatives like the Local Authority Housing Fund (recently boosted by £450m) and the Mayor of London’s Right to Buy Back Scheme support this approach. The repurposing of England’s 261,000 long-term vacant homes presents another opportunity to increase supply, particularly if incentives were available to bring such homes back onto the market as TA or for social rent, though careful consideration must be given to meeting higher energy efficiency standards for such homes.

3. Policy and system reforms

The Renters Rights Bill’s abolition of Section 21 ‘no-fault’ evictions has the potential to greatly reduce homelessness caused by the end of a private tenancy – currently the single biggest cause of people approaching councils as homeless. Other potential future reforms available to Government include a long-term commitment to regularly update LHA rates to accurately reflect 30% of market rates and enabling local authorities to claw back costs at present day rates. At a local authority level, consideration should be given to how allocations policies could alleviate TA pressures, including through the prioritisation of households in TA, or how greater need could be met through financial incentives for ‘rightsizing’ and chain lettings.

4. Social impact investment

Innovative funding approaches show promise, with successful schemes using institutional capital to acquire and refurbish properties for homelessness charities and housing associations. While these schemes remain relatively small, they provide alternative funding during times of constrained public spending.

Given the complexity of this ‘wicked problem’, success requires a coordinated approach combining multiple solutions and sustained commitment from central government, local authorities, and the housing sector to implement both immediate interventions and long-term structural changes.

These issues will be discussed at the forthcoming one-day conference which Campbell Tickell is hosting alongside Devonshires on 4 November 2024. Register for free – Temporary Accommodation Conference.

Find out about our work with local authorities

To discuss any issues raised in this article, please contact James McHugh: james.mchugh@campbelltickell.com 

The crisis in temporary accomodation: what can be done about it?

Campbell Tickell is extremely proud to announce that it is has been certified as a B Corporation. Verified by B Lab, certified B Corporations (or B Corps) are companies that meet high standards of social and environmental performance, transparency, and accountability.

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