Analysis
England’s ‘broken’ housing system is now a
problem no council can avoid
Patrick
Butler
Social
policy editor
High house prices, soaring rents and benefit cuts are
forcing more and more to seek help from local authorities
Mon 30 Oct
2023 05.00 GM
Bankruptcy,
Ernest Hemingway once wrote, comes gradually, then suddenly. For years,
England’s dysfunctional housing market was a distant concern for most district
councils in the relatively affluent home counties; now, unexpectedly, it is in
their faces, out of control and threatening to overwhelm them.
Hastings, a
coastal district in East Sussex, has warned it could become effectively
insolvent this year as the housing crisis rips through. High house prices,
soaring rents, housing benefit cuts, a 120% year-on-year rise in evictions,
shortages of social housing and a shrinking, volatile, local private rented
sector have created a perfect storm.
It expects
to spend £5.6m – almost a third of its £17m net budget this year – picking up
the pieces, providing emergency housing for more than 1,000 homeless people. By
contrast, in 2019, it spent just £730,000 supporting 170 people. A homelessness
service that ticked over relatively uneventfully for years could now break the
council.
The crisis
is so acute that earlier this year Hasting borough council’s Labour leader,
Paul Barnett, even appealed to local residents with spare rooms to consider
letting them to homeless people. The council hopes to buy 50 homes to house
homeless families and has longer-term plans to build more social housing, but
this seems too little and too late.
“The
financial difficulties that we are facing are a result of national housing
crisis. The system is broken, and as a result is forcing many of our residents
out of secure accommodation into temporary housing provided by the council,”
Barnett said in a statement this week.
His point
is that the housing whirlwind crashing through councils such as Hastings is
structural. The town may be an outlier but the crisis is national, affecting
scores of authorities all feeling the effects of a “seismic shift” in housing
affordability caused by rising demand and shrinking supply.
The shift
is driven by many things: demographic change, the long-term erosion of social
housing and housing benefit levels, the failure to build sufficient new homes,
the growing impossibility of home ownership for many, the rise in “no fault”
evictions and the defunding of local authorities.
The
consequence is human pain and social disruption. Stephen Robinson, the Liberal
Democrat leader of Chelmsford city council, said a pensioner recently presented
as homeless at the council’s housing office, facing eviction after their rent
was raised by £200 a month. But in the main it deals with familieswho have been
priced out of the area and placed in temporary housing, often miles away in
Ipswich or Peterborough.
The
imminent closure of Home Office-funded hotels for Afghan asylum seekers in the
coming weeks could exacerbate the housing problem. Robinson said this was a
relatively tiny part of the risk facing the council: “Most of the 465
households we have in temporary accommodation are local families in work, or
who have lost a job.”
Andrew
Baggott, the Tory leader of Basildon borough council in Essex, said that
radical solutions were needed, including regulation of the private rented
sector to keep rents affordable, long-term government investment in social
housing, and an increase in local housing allowance to reflect local rent
levels.
Asked
whether a government long-wedded to the idea of a deregulated housing market
and a smaller benefits bill would listen to such demands, he replied: “Times
change. Any government that does not change with the times is not fit for
purpose, by definition.”
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