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Report: A Capital in Crisis

By: Cecil Sagoe, Thomas Weekes and Eleni Stratton
Published: February 2020

Report: A Capital in Crisis

London is at the epicentre of a deepening national housing emergency. For people living in London, the impact of this spiralling crisis is often unescapable. Families are struggling with unaffordable and insecure housing, which is leading to sharp increases in homelessness. There has been a collective failure from governments of all stripes to deal with this emergency. Without urgent action, things will only get worse.

With a new government at Westminster and Mayoral elections in London, 2020 represents a crucial opportunity to bring immediate attention to London’s growing housing emergency and to achieve change. London’s housing emergency is so bad that it is eroding the ability of households on low incomes, who make up much of London’s workforce, from accessing a genuinely affordable place to call home.

This emergency is being driven by two things. Firstly, spiralling private rents that are unaffordable to renters, which is being experienced most harshly by private renters on low incomes whose Local Housing Allowance (LHA)—the housing benefit available to those renting privately—does not cover the exorbitant cost of renting. Secondly, it is being driven by a lack of social rent homes—the genuinely affordable homes that are the only long-term solution to the housing emergency in London, and across the country.

The disappearance of social rent housing delivery in the capital has meant that central government and London’s local authorities are increasingly relying on the private rented sector, and therefore to LHA to relieve homelessness. This has been a recipe for disaster. LHA does not adequately cover private rents, leading to homelessness and giving local authorities no choice but to place more and more people in eye-wateringly expensive ‘temporary accommodation’, often beds in hostels or bed and breakfasts, or tiny, poor quality flats, leased nightly at huge costs from private landlords. A toxic combination of exorbitant private rents, insufficient LHA levels, and the disappearance of social rent housing delivery is not only fuelling an affordability crisis for households on low incomes in London, it is also coming at a huge cost to the public purse.

If this growing emergency is to be tackled, then collective government action is necessary. The report shows that London’s housing emergency, which is also having national consequences, will only be tackled through a revolution in social housebuilding and increases to LHA so that it covers at least the bottom 30% of private rents. The report will point to key measures that central government, local government and London’s next Mayor must take to solve the city’s housing emergency.