Homelessness In UK Rise As Rents Soar
UK’s lack of affordable housing collides with growing demand, rising living costs and the tighter margins faced by landlords. Rents in the country are at their highest since the Office for National Statistics began recording them in 2016, following years of stagnant housebuilding and growing demand. The increase has left areas that did not have a significant problem with homelessness suddenly confronting soaring numbers of people with nowhere to live. Oldham has been a relatively affordable place to rent historically but its rate of homelessness is now nearly twice the national average, with an 80 per cent year-on-year increase between January and April, and a similar rise in the number of children living in emergency housing. The government’s latest homelessness statistics reveal the growing numbers at the sharp end of the crisis; the number of children living in temporary accommodation was up 10 per cent year on year in the first three months of this year. Experts said Britain’s shortage of housing was at the heart of the crisis. The shortage of rental accommodation has been exacerbated by the challenges facing landlords, who have been hit with rising interest rates and higher mortgage costs over the past year, making buy-to-let investments less attractive. A report by the real estate consultancy Savills earlier this year found that net profits for investors in the private rented sector had fallen to their lowest levels since 2007, driven by interest rate rises and taxation changes. Beadle said a growing number of landlords were now in an “invidious position” financially. Even taking the mortgage rate rises of the last year “out of the equation”, returns had been “pretty marginal for quite a period of time”, he said. While there were no signs yet of an exodus of landlords from the market, anecdotally “more people are selling than buying and more people are saying that they are going to sell than invest”, he added. “I’ve just spoken to a chap whose mortgage is going from £800 to £1,500 — he’s not going to be able to pass on a £700 rent increase he might have to sell.” Such decisions are feeding into destitution statistics. In the first quarter of 2023, the number of households becoming homeless as a result of landlords either selling up or raising rent jumped 27 per cent from the previous year, according to government data. Experts say the 2016 freezing of Local Housing Allowance, the benefit intended to top up the rents of poorer households living in the private rental sector, has exacerbated the problem. An analysis by the Institute for Fiscal Studies think-tank, using data from online estate agency Zoopla, found that across Britain just 5 per cent of private rents advertised in the first quarter of 2023 could be covered using LHA. In Manchester booming demand for housing has caused rents to outstrip LHA rates, leaving it with a severe family homelessness crisis for some years. The median rent for a three-bed house in the city rose 13 per cent between 2022 and 2023, according to the ONS, while homelessness due to rent rises or landlord sales rose 500 per cent year on year in the first quarter of this year.
Tags : UK affordable housing growing demand living costs landlords rents homelessness Britain real estate consultancy Savills