A Housing crisis crying out for real help!
Updated: Apr 7
The statistics are saddening and almost unbelievable – but they are real!
Added to that are the following:
An increasing number of families presenting themselves as unintentionally homeless across most Local Authorities. 185 families in one week in Brent, reported recently! In Newham, between Nov 2021 & Nov 2022, total number of homelessness presentations increased from 5,899 to 6949 (or 17.8%). That is an increase of 1,050 presentations over the course of 1 year!
Local authority spend on temporary accommodation continues to rise astronomically (not helped by reported squeeze on hotel/B&B availability due to the Home Office gazumping Local Authorities to secure housing for asylum seekers!). Between December 2021 and December 2022, Newham Council’s gross total monthly TA spend on all accommodation types increased from £48.77m to £50.39m (an increase of 3.3%). In real terms that is an increase of £1.62m!
One in five children are now living in overcrowded, unaffordable or unsuitable homes.
Families in some parts of the country are spending 50% of their income on private rental- worsened by the regulatory environment which is making an increasing number of private landlords to exit the market – creating a demand push on rents (more so as Local authorities are not building). 47% reduction in PRS housing is further fuelling the housing crisis according to Darren Levy ( Director of Housing, LB of Newham), who spoke at our March 2023 Council Building Homes (CBH11) event.
Rather than sweating their assets, some Local Authorities are actually disposing of their land assets to fill the gaps in their dire financial position. This is against the line of thought of Lara Oyedele (President, CIH), who also spoke at our March 2023 Council Building Homes (CBH11) event. We cannot agree more with Lara.
Let me stop here, but hopefully, the enormity of the problem and the fact that the country is literarily throwing away money as sticking plasters in trying to deal with the housing crisis is becoming clearer.
As property and Construction professionals, we have had to respond to this – reason why we focused our March 2023 CBH 11 event on exploring practical ideas on how this unacceptable situation can be arrested and what structured medium to longer term plans can be put in place to help us turn the tide. There are two clear losers with the status quo:
Local Authorities spending £Bn’s on funding temporary accommodation – paying the private sector – with no asset to show for it. £Bn’s are being spent annually on a recurrent expenditure basis! The irony is that this approach will not address the problem and will only worsen Local Authority financial situations into the future – bearing in mind that the ongoing economic crisis has and will continue to result increasing demand for truly affordable housing generally.
Ordinary people, already faced with a cost-of-living crisis, having to choice but to either live in expensive & unsuitable privately rented accommodation (if they can find one); pay over the odds for privately rented accommodation if they can find one; or give it all up and present themselves to their Local Authorities as unintentionally homeless.
And the cycle goes on….! Bear in mind however that Local Authorities in England have a statutory duty to secure accommodation for unintentionally homeless households in priority need under Part 7 of the Housing Act 1996 (as amended). So, no let-off for the current wasteful expenditure on temporary housing….except we change course!
At our March 2023 CBH 11 event practical ideas were discussed - practical initiatives to stem the tide, including:
Exploiting the real potential Joint Ventures bring (through Public-Private Partnerships) in unlocking the housing crisis. Kunle Awofeso (a Director and Partner at Airey Miller) strongly believes that given the enormity of the problem and despite the added benefits of other initiatives, JV/PPP is the singular most impactful initiative to address the crisis at scale.
Creating the right environment for commercial partners (linked to the above).
Viewing housing need through a national lens- rather than individual Local Authority silos. This is important in dealing with the derived demand of land for housing and the relativity of its supply (relatively more acute in inner cities/towns). We agree with Darren Levy ( Director of Housing, LB of Newham) on this.
Exploiting the benefit of MMC- especially modular housing where site location, logistics and other parameters allow.
Looking to repurpose existing under-used/un-used assets. Don’t sell off for short term gain!
Exploring Right to Buy buyback pipelines.
We are committed to doing our bit to assist our Local Authority clients using our significant experience in the industry to model the appropriate type of JV/PPP and finance structures – and even those that could be blended with the limited grant funding available and/or loans from PWLB. PPPs are not PFIs. All it takes is a political will, a realisation of the economic benefits (as already seen by some Local Authorities embracing PPP) and the right JV advisor.
We need to keep building!
Airey Miller is well positioned to assist Local Authorities to derive even better value from their land assets and expenditure.