London’s Homelessness Crisis Deepens: Budgets Burst as Temporary Housing Costs Soar by 25%

Expenditure on short-term accommodations for the homeless in London increases by 25%

The majority of London's local governments exceeded their budget for homelessness last year, as the city faces challenges accommodating over half of England's homeless individuals.

Political correspondent @alixculbertson

Friday, August 2, 2024, 3:

Sky News has learned that London councils have experienced a 25% increase in the expense of housing homeless individuals in temporary accommodations over the past year, as landlords opt for selling their properties or renting to private tenants.

Several local councils in the capital city are on the brink of financial collapse due to surging needs for homelessness services and rising housing expenses. This situation has forced these councils to use their own funds, as the financial support provided by the government falls short of meeting these escalating costs.

Recent statistics reveal that in the year leading up to April 2024, London boroughs exceeded their budgets for homelessness by £208 million, as per information provided by London Councils, the body representing the city's local governments.

Twenty-nine of London's 33 boroughs have exceeded their budget allocations for homelessness, redirecting funds initially designated for different services.

In numerous instances, the cost of addressing homelessness is a significant fiscal hurdle that might push local governments toward insolvency.

Funding that local authorities receive from the central government for covering the expenses of short-term housing has remained unchanged since 2011, even though the costs have risen and an increasing number of London's boroughs are dependent on costly bed and breakfasts and hotels.

London faces the country's most acute homelessness crisis, with 57% of England's homeless households in temporary housing located in the capital, according to government statistics.

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According to recent figures released by London Councils, the number of people residing in temporary housing in London increased by 10%, reaching 60,959 in the year leading up to April 2024.

The count of families housed in bed and breakfasts, which is not ideal either economically or socially, has increased by 25% to 2,249 families.

Property owners opting to sell or lease privately

The primary reason for escalating expenses is a severe lack of reasonably priced housing, alongside an increase in homelessness.

During the initial three months of 2023, the availability of rental properties in London decreased by 41% compared to the average before the pandemic, while across the nation the reduction was 33%.

Private landlords are choosing more frequently to end their contracts with local councils, opting instead to lease to private tenants or to sell their properties.

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From September 2022 to April 2024, boroughs were issued over 10,000 notices to vacate temporary housing arrangements, representing an 18% reduction in London's overall temporary accommodation inventory.

Read further: Prince William is optimistic that homelessness can be eradicated. Labour withdraws £1.3 billion in funding from AI initiatives.

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Newham on the brink of

The borough of Newham in east London may go bankrupt unless it gets financial assistance from the government.

A recent study revealed that at the close of the 2023-24 fiscal year, Newham Council faced a deficit of £22.2 million. The council would have stayed within its financial plan had it not been necessary to increase its budget for homelessness services.

An additional £18.5 million has been designated to the budget for temporary housing for the fiscal year 2024-25, yet projections indicate that expenses might exceed £40 million.

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The council stated that it has adopted a "cautious strategy" in addressing fiscal difficulties.

Councillor Zulfiqar Ali, who oversees finance, commented, "It won't suffice, given that our financial governance and strategies for addressing homelessness have not been unsuccessful."

Instead, previous government strategies and the shortcomings of the housing market in both London and across the UK are to blame for our current predicament.

"This underscores the need for immediate and critical decisions, and the possibility of governmental support might also be necessary."

Demands for assistance from authorities

London Councils has urged the government for a significant boost in emergency homelessness funding and to lift the cap on subsidies for temporary housing.

The organization is urging the government to permit local authorities to purchase additional properties from private landlords for use as temporary housing.

The organization has urged the government to prioritize addressing homelessness significantly, advocating for collaborative efforts across various departments.

A representative from the ministry of housing, communities, and local government informed Sky News, "The number of homeless people has surged dramatically, with an excessive number of families residing in temporary housing both in London and nationwide."

Addressing the housing shortage is at the top of our agenda. We are actively addressing the fundamental issues behind homelessness by initiating the largest expansion of social and affordable housing construction in decades and eliminating Section 21 'no fault' evictions.

"We are committed to addressing this problem through a comprehensive, government-wide approach in collaboration with mayors and local councils, aiming to steer Britain toward the elimination of homelessness."

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