Tackling homelessness in Thanet will be ‘even more challenging’ due to the rates of housing benefit for those in the private sector remaining frozen.
The Local Housing Allowance sets the maximum amount a council will pay in housing benefit for a private rental but this has been fixed by government since 2020 and despite Universal Credit and other benefits going up in line with inflation next April this is not the case for LHA.
Thanet council’s housing director Bob Porter highlighted the issue at a meeting last week when asked by Labour’s Councillor Rob Yates for an update on the homelessness situation in the district.
Mr Porter revealed there are 197 households in temporary accommodation, slightly down from a high point of over 200 last month but still at the highest rate for three years.
He said: “The latest spike follows issues related to covid, changing patterns of where people live and where they work, changing behaviour of landlords leaving the sector, either selling or moving into short term lets and cost of living issues and rent increases.
“In the latest budget announcements from government there were announcements about benefits increasing with the rate of inflation but what government haven’t done is change the LHA rate and you would think that would be increased in line with inflation in the private rented sector but it hasn’t and that’s going to make it even more challenging.”
Currently the LHA rates for Thanet are per month:
Shared accommodation £299.17
1 bedroom £473.72
2 bedrooms £648.22
3 bedrooms £797.81
4 bedrooms £947.40
But these amounts do not reach the rates being asked for in the private rental sector. A search of rentals this week shows the cheapest rooms for rent at £90-£100, leaving a £100 per month shortfall.
For a one-bed home the cheapest flat listing was £595 per month, leaving a £120 shortfall’ the cheapest 2-bed home listing was at Arlington House for £575, coming under the LHA rate, but the majority of properties were £695 and above.
The cheapest three-bed home listed was £1000pm, far above the LHA rate of £797 and the lowest four-bed private rental was £1,100 with most at £1,350 and above.
‘A perfect storm’
A report by housing charity Shelter says private rents across the country have gone up by between 5%-8% since LHA has been frozen (2020). LHA is supposed to cover rent for the cheapest 30% of properties in an area but the current rates fail to do this.
In its report published this Autumn the charity says: “The housing emergency in England has left hundreds of thousands struggling to afford to keep a roof over their heads. We now face a perfect storm of spiralling rents and out of control bills which threatens to push many towards the brink of homelessness.
“Private renters are disproportionately exposed to the cost of living crisis. Research by Shelter has found that almost a third (32%) of private renters are spending half their monthly household income or more on their monthly rent. Nearly one in seven (13%) private renters have seen their rent increase in the last month, of whom almost a quarter (24%) have seen it increase by more than £100 a month
“Private renters are also the most likely tenure to already be in fuel poverty. But low-income renters are finding that they’re falling short on their rent – to the tune of £1,812 a year, because the safety net is failing them. Renters are struggling because the amount they can claim in housing benefits (by which we mean legacy housing benefit or universal credit housing allowance) has been frozen since March 2020 – while rents have shot up by over 5% in England and in some areas by more than 8%.
“Newly listed rents have gone up even more, pushing new homes further out of reach. The local housing allowance (LHA) freeze is leaving people with massive shortfalls each month.”
“54% of private renters claiming housing benefit have to make up a shortfall to cover their rent, with an average shortfall of £151 a month. Low-income private renters are simply being squeezed out of the private rental market and pushed towards homelessness. Many may end up in the expensive, largely unregulated temporary accommodation market– where councils must procure accommodation to offer under homelessness duties.
The Shelter report says recent statistics showed a record number of households were found to be threatened with homelessness due to the end of a private tenancy in the first three months of this year, and the number of families becoming homeless and ending up in temporary accommodation is rising.
The report also notes that in areas with very high affordability pressures, even restoring LHA to the 30th percentile may not be enough to keep up with an overheating rental market. It adds: “Ultimately, inadequate LHA risks a tidal wave of homelessness.”
Loss of accommodation
The increasing loss of social housing is also an issue across the country, including in Thanet where Orbit Homes have sold properties and even Kent County Council (KCC) is selling residential property that it owns in the district.
KCC is selling Thanet Lodge in Margate, which has four flats, through Clive Emson auctioneers at a guide price of £275k. The authority also owns homes in Surrey Road, Norfolk Road, Edgar Road Dalby Square, Nautical Mews and Park Crescent Road.
The sale of homes by public sector bodies is done without conversation with Thanet council, which Mr Porter said was “disappointing.”
He said: “It is disappointing to see another public sector body put housing assets or land to market without consulting us, we would always want to have a conversation with our public sector partners about how we could work together on assets like that, particularly housing accommodation leaving the affordable sector and going into the market, clearly we would want to talk about that.”
He added: “We know Orbit have been disposing of housing stock, mostly where their surveyors have assessed it was too expensive to improve the energy ratings of those dwellings, I’m not sure that position really solves the problem as you end up with a poorly performing dwellings in the private sector.”
Homelessness service to be axed
KCC has also announced plans to axe its £5 million Homelessness Connect service in 2024.
The decision was branded “devastating” by local homelessness charity Porchlight, which is part of the Kent Homelessness Connect scheme.
There are 33 units of accommodation listed by Kent Homelessness Connect’s website as in Thanet which are managed by Porchlight but these could be lost as the scheme ends.
A TDC spokesperson previously said: “We have managed to secure interim funding to keep these services running until March 2024, however after that period they are at risk.
“The loss of these bed spaces will lead to increased demand for the council’s statutory homelessness service.”
Shelter says Local Housing Allowance (LHA) should be restored to cover at least the cheapest 30% (of local rents. The government should make this a priority measure for tackling the cost of living crisis to avoid a wave of homelessness
It also recommends LHA rates should be re-linked to the cost of renting in future years to keep them in line with at least the 30th percentile as the private rental market fluctuates and, in the longer term, says there needs to be investment in a new generation of social housing, with rents pegged to local income.
As of November, Thanet District Council had more than 600 active ‘homelessness cases’, including those who are currently homeless, at risk of homelessness and being supported by rough sleeping services, or awaiting a council decision on whether to house them.
The council recently projected an overspend of £880,000 just on temporary accommodation needs, on top of an additional £400,000 this financial year allocated to deal with homelessness and fund related services.