Dr Rosalind Beck is a doctor of Criminology and a Conservative Party member in South Wales.
The National Audit Office report on Homelessness, published this week, concludes that a significant cause of the recent increase in homelessness in England is the Government’s own policies, specifically freezes and the caps on Local Housing Allowance. Whilst these are important factors, some flaws in the report appear to have gone unnoticed.
Often the most telling part of official reports is what they omit to mention. For example, it is stated in the report that street homelessness more than doubled between 2010 and 2016 and currently stands at around 4,000, but there is no information on who makes up this category and the bare statistics alone tells us too little.
In fact, 4,000 is likely to be a gross underestimate. Figures compiled by the Combined Homelessness and Information Network and published by the Department for Communities and Local Government state that in London alone there were 8,096 registered as sleeping rough in the 12 months to April 2016 and more than half of these were migrants.
Local authorities do not have a responsibility to house any of these migrants who are illegally in the country, although the majority of the migrants in these figures were from Eastern Europe. For those who are here illegally, how is that problem solved when the authorities are not allowed to solve it?
Also, the fact that these homeless people have come from abroad suggests that welfare cuts have not ‘pushed them out’ of housing as the NAO report suggests; they are quite likely to have not accessed housing in the first place. In addition, how many of the rough sleepers in the UK choose to remain on the streets despite all offers of support? A case fitting this scenario was reported on just this week.
Personally, I always find it wrong to bunch street homeless in with those living in temporary accommodation; as undesirable as the latter is (and especially over the long term), it cannot be equated with trying to sleep out in the wind and the rain in a doorway or on a park bench.
You could say that having shelter or not having shelter are polar opposites. It is also in fact possible that with all the effort that charities make to eradicate rough sleeping that not much more can be done without it amounting to social cleansing – and also that local authorities’ duties need to be redefined if a dent in these figures is to be made. I would suggest that it is important to discover how many of those living on the streets actively choose to do this and do not see it as a problem themselves; one would then be left with the important figure of how many are desperate to obtain housing.
The report, also follows the pattern of many reports of all kinds in the UK in that it focuses on problems which are disproportionately an issue in London – London accounts for 70 per cent of the use of temporary housing for example. As part of the majority of British people who live nowhere near London I want to shout out: ‘We don’t all live in London!’ And: ‘We don’t want ‘solutions’ to problems we don’t have!’
A further problem I had with it is that it is simply not acceptable for the Auditor General to state in the report:
‘the ending of private sector tenancies has overtaken all other causes to become the biggest single driver of statutory homelessness…’
‘Before the increase [in the ending of private tenancies} homelessness was driven by other causes…’
It is a tiresome feature of discussions on this topic that the ending of a private tenancy now gets defined as an actual ‘cause’ of homelessness (if an employer sacks an employee for stealing, is the sacking of the employee the cause of the ending of the employment or is the employee’s behaviour the cause?); the housing charity ‘Shelter’ has been pushing this line relentlessly and is very successful at getting its narratives adopted as ‘Government-speak,’ even if these narratives are rather stupid. Of course their success is largely predicated on the fact that landlords are an easy target for populist attack.
Despite what the Auditor General states, homelessness amongst the indigenous population – in the sense of losing a home that one would dearly wish to remain in – is still driven by the same causes as it always has been – issues like family breakdown, non-payment of rent and poor tenant behaviour (tenants may choose to spend the money instead on drugs, alcohol, gambling or other lifestyle choices and/or may have mental health issues which impair the tenants’ ability to manage their finances).
These kinds of issues cause tenants to lose their accommodation in the private and social rented sector. It can also be because the landlord increases the rent to a level which may be unaffordable for the tenant (more on this later), but this has not been a main reason to date.
In addition, the report makes no mention of the fact that in recent years the private rented sector has more than doubled in size over the last 17 years to around five million, picking up the slack left by successive Governments’ sell-off of social housing; it is highly fortuitous that private individuals have stepped in to cater for the many who are not in a position to buy (students, young professionals, the low-paid, those on benefits, mobile workers, migrants and so on), and it is scarcely surprising therefore that a greater proportion of the people who become homeless now come directly from the private sector than before as it is the latter who is housing them in the first place.
Some commentators have picked up on this report to suggest that somehow landlords could be prevented from ending these tenancies and from regaining possession of their private property – and that this would then solve homelessness. How this would tie in with individuals’ property rights is less clear. It is incredible however, the extent to which many aspects of the left-wing agenda on housing have not only been adopted by the Conservative Government but even been extended; even now the Department for Communities and Local Government is scouting around for new ways to ‘regulate’ the sector – meeting industry representatives such as the National Association of Landlords and Residential Landlords Association next week to discuss this.
What is critical in this context, but is not mentioned in the report is that the fiscal attack launched by George Osborne against private landlords – imposing a tax on finance costs (already paid out to the lender) as though these are profits is likely to have just as big an impact on homelessness as are cuts to benefits. This is becoming a far more important ‘driver’ of homelessness since it began to be phased in, in April this year (the measure is contained in Section 24 of the Finance (no.2) Act 2015). I have written a comprehensive report on it.
The fact that this is of course a profoundly unconservative measure which should never have gone on the statute books has also been mentioned on ConservativeHome by Tories including Iain Duncan Smith, David Jones and Lord Flight. These are still lone voices however with the majority of MPs of all parties too scared to set themselves apart and speak up on this matter; even as the damage is already occurring to the housing sector as a result of this, as reported by the Royal Institute of Chartered Surveyors.
As a case in point, James Cartlidge reiterated in Parliament this week, presumably as part of a quest to prove he is not part of the ‘nasty party,’ his support of the measure. However, in the current climate it takes far more courage for a politician to speak up in favour of landlords than against them.
In the words of Mark Twain (1905):
“Whenever you find that you are on the side of the majority, it is time to reform (or pause & reflect).’
It is also a familiar trap to think that you are being radical when you are in fact being highly conformist.
The fact that he also implied in a debate in Parliament that it was virtuous of the former Chancellor to introduce such a bizarre tax regime on a group of natural Conservative voters trivialises what landlords see as inherent treachery by their own party who should be on their side. Landlords felt tricked into voting for the only party presenting itself as the party of business and the only party which did not put forward an explicit anti-landlord programme in its Manifesto.
What was not appreciated by Tory High Command, was the fact that many landlords – a significant number of whom face having their businesses ruined – then vowed to not vote Conservative again. It is possible that this alone cost the Conservatives their majority at the last election and will further impact on the next. On the other hand, it is unlikely to have gained the Conservatives votes from tenants – whether potential first time buyers or not – who would either be tribally-inclined Labour voters and/or mostly unlikely to know about the measure (and if they did, might well see it the same way that landlords do; a measure which has led to their rents going up). So it was and is a lose-lose electorally as well as being hugely surprising and disappointing for landlords.
One is of course less surprised at the attitude of Labour politicians. Melanie Onn, for example, in her response to the National Audit Office report cleverly suggests that capping rents (official Labour policy) would stop rents from increasing (and presumably stall increases in levels of homelessness); I have it on good authority that the current Chancellor has also mentioned this as a solution to prevent rents rising.
The logical consequence of all of this: capping and/or freezing Local Housing Allowance, whilst at the same time bringing in a measure which pushes landlords to raise their rents as high as they can possibly go (and then, possibly trying to put a cap on rents), is a recipe for disaster in the private rented sector and consequences of the first two policies are beginning to now show up in the homelessness figures. The evidence today also shows how landlords are being driven out of the sector.
This does not surprise many of us, including eminent economists and professors, who predicted that homelessness would rise exponentially as a direct consequence of the fiscal attack on the private rented sector and the cuts to benefits. It is such a logical progression that a scientist wouldn’t bother to conduct an experiment on something where the outcome is so predictable.
So it is high time that this nonsensical interference (whereby the Government causes a problem and then in the process of trying to find solutions, makes it worse) is halted. The Government needs to see the private rented sector as part of the solution rather than the problem (the housing shortage would be far greater if private individuals hadn’t stepped in to provide all this essential housing). It is treating institutional private rentals as a solution – despite their far more expensive accommodation which is leading to spiralling student debt levels. This makes no sense.
Finally, because the report omits to mention the attack on the private rented sector as one of the main causes of rising rents and therefore of homelessness, the fact that the lower-paid in London and elsewhere are finding their rented homes ever more unaffordable is identified but not explained.
Landlords with large portfolios of cheap rented housing, all over the country, many of whom have renovated decrepit housing (think ‘Homes Under the Hammer’) and rented it out, using buy-to-let mortgages to fund this, are now facing astronomical tax bills. To pay these, their first resort is to increase the rents as high as they will go; often on homes which have been rented out at comparable rents to that charged by social housing providers. Others are exiting the sector.
Whereas Theresa May might be worried about the JAMS, she should be equally concerned now about the NAMS (the Not Actually Managing) – those who would have lived in the social housing had it not got sold off and who live in the private rented sector, under siege now, landlords and tenants alike.
Indeed, as Section 24 is phased into the tax system between 2017 and 2021, the NAMs will be ‘phased out’ – of housing.