Almost 60,000 Londoners living in the private rented sector are likely to become homeless over the next six years, unless the government changes its stance on housing benefits.
That’s the stark verdict of research commissioned by London Councils, if the government opts to maintain its freeze on Local Housing Allowance (LHA). Unsurprisingly, the cross-party group wants to see it raised in the Chancellor of the Exchequer’s forthcoming Autumn Statement.
Out of the capital’s 2.7m private renters, 393,773 claim LHA to help them meet housing costs, according to government data cited by the organisation.
The research, conducted by Alma Economics, estimates an additional 16,500 to 22,000 London households will become homeless by 2030 unless LHA is raised.
Based on this, London Councils calculates that 22,000 households equates to 58,740 individuals – including 28,000 children.
LHA was originally meant to cover the costs of rent in the bottom 30% of local private rental markets but a combination of below inflation increases, and outright freezes, have seen rents increasingly outstrip support.
According to London Councils, Alma Economics’ research suggests that if LHA was retorted to this original coverage, more than £100m each year could be saved on the public finances in London. Most of these savings would come from reduced pressure on London boroughs’ homelessness services, but also from lower costs to other parts of the public sector such as the NHS and social care.
Councillor Darren Rodwell, London Council’s executive member for regeneration, housing and planning, said: “Raising Local Housing Allowance is vital for getting a grip on the homelessness crisis.
“London’s homelessness pressures are already enormous and unsustainable. On current trends, almost 60,000 more London renters are set to become homeless in the coming years.
“London is the epicentre of the national homelessness crisis. The situation is increasingly unmanageable and requires urgent government action. We cannot continue in this disastrous direction.
“Just as the government boosted LHA during the Covid-19 pandemic to prevent a wave of mass homelessness, we need a similar emergency response to the situation today. An increase in LHA will help low-income households pay their rents and avoid homelessness, which can be so devastating to families and bring massive costs to local services.”
London accounts for more than half (57%) of England’s total number of homeless households in temporary accommodation. London Councils’ most recent figures show that almost 170,000 Londoners are currently homeless and living in temporary accommodation arranged by their local authority – equivalent to around one in 50 Londoners overall and one in 23 children in the capital.
Boroughs warn that the situation is increasingly unmanageable and that they are set to overspend their homelessness budgets by £90m this year.
Image credit: Roman Bodnarchuk – Shutterstock
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