London homeless crisis warning as private rents soar

·2-min read
Rents in the capital are now higher than pre-pandemic levels in every borough  (PA Archive)
Rents in the capital are now higher than pre-pandemic levels in every borough (PA Archive)

London faces a huge homelessness spike without “urgent action” as the cost-of-living crisis hits tens of thousands of private renters, councils warned on Friday.

Rents in the capital are now higher than pre-pandemic levels in every borough and have increased by an average 15.8 per cent across the capital over the year to June 2022, data shows.

It comes at a time of soaring inflation and food costs and Friday’s announcement that energy prices will rise by 80 per cent in October.

The London Councils cross-party group said new analysis has found fewer than one in 10 properties in the capital are affordable to Londoners who depend on welfare support for paying their rent.

An estimated 125,000 lower-income Londoners are now at risk of homelessness because their benefit entitlement falls short of meeting their rent.

Darren Rodwell, London Councils’ executive member for housing, urged the Government to urgently increase Local Housing Allowance (LHA), the maximum amount people renting from a private landlord can claim in housing benefit or Universal Credit, to avoid a “devastating” rise in homelessness.

He said: “The combination of rising rents and the worsening cost-of-living crisis means many tens of thousands of Londoners are at real risk of homelessness in the coming months.

“Without urgent action, we’re worried we’ll see growing numbers of low-income households unable to afford their rent and becoming homeless. The consequence for those Londoners could be devastating.

“We’re keen to work with ministers on this important issue, as tackling homelessness is a priority for us all.”

The current caps on LHA in London are around £260 per week for a one-bed property, £302 for a two-bed and £354 for a three-bed.

At the start of the pandemic, the Government increased LHA cover but rates have been frozen since 2020.

The average monthly rent for a flat in London’s most expensive borough Kensington and Chelsea is now £3,960 per month, while it £2,280 in Tower Hamlets, an area with some of the highest rates of child poverty in the UK.

Abigail Davies, Director of Savills housing consultancy team, said: “Reviewing what’s happened over recent years shows that constraining the help available to pay rent results in hardship and, ultimately, the risk of homelessness.  The experience of benefit-capped families in London is perhaps the most stark, with the prevailing caps making it almost impossible for them to access suitable accommodation.”

London already has 150,000 people in temporary council accommodation — including 76,000 children.