Memorandum from Crisis (CRED 44)
Crisis is the national charity for single homeless
people. We welcome the Committee's timely inquiry into the Government's
response to the effect of the economic downturn on its housing
policies. Over recent months, we have been raising concerns both
that the economic crisis will cause more people to become homeless
and that those who are already homeless will find it harder to
get a home. Government has spent billions on bailing out the banks,
now they must spend just a fraction of that on supporting ordinary
people. In this submission, we outline both the immediate and
the long term challenges as well what we believe Government should
do to prevent the financial crisis becoming a human one.
SUMMARY—KEY
ISSUES AND
RECOMMENDATIONS
We must deal with the current crisis and circumstances
but also use this as an opportunity to tackle longer term issues
and reform our system of housing supply and homelessness assistance.
In particular, as well as addressing the needs of those being
made homeless now, it is equally critical that we do not forget
those who are already homeless or in housing need, who risk being
left even further behind.
Housing Demand and Supply
— Existing housing demand has not gone
away. The population is growing and there are around four million
people on the waiting list for social housing, as well as tens
of thousands of hidden homeless households.
— House building has not kept up with
demand and we do not have nearly enough social housing.
— At the current rate, Government will
not hit its house building targets until 2029[51]
with the economic crisis leading to a collapse in new house building.
— Government must remain committed
to its house building targets and bring forward the necessary
funding to deliver them.
Repossessions
— We are seeing a sharp increase in
repossessions, which are predicted to hit 45,000 by the end of
the year.
— We also need to consider how this
figure may rise further as people get into difficulty repaying
other debt secured against their property and are affected by
rising unemployment.
— Those in the private rented sector
are also facing housing insecurity as buy to let mortgage holders
are repossessed.
— Whilst we welcome the Government's
recent guidance to lenders and the courts to ensure that a repossession
order is not the first port of call. It will be important for
the Government to ensure the situation is monitored closely and
action taken, as appropriate, to enforce the guidance. Measures
to provide assistance to some homeowners announced in the mortgage
rescue package do not go far enough. We would like to see a wider
range of options available to homeowners facing difficulties,
including measures such as local authorities taking equity shares
in properties and sale and rent back by the state. These measures
need to come into force now.
— Landlords and creditors should be
required to notify their local authority when they raise repossession
proceedings or serve other notices. This would alert local authorities
to households at risk of homelessness and enable them to respond
to prevent homelessness.
Advice and Assistance for All
— We must help all those facing homelessness,
in all sectors of the housing market.
— Many people who will get into difficulty
are not entitled to be housed by their local authority, according
to the restrictive terms of current homelessness legislation,
and, too often, the advice and assistance local authorities provide
is meaningless.
— Local authorities should have a new
duty to more actively prevent people becoming homeless and to
help all those facing homelessness, beyond the current statutory
duties.
— We need a universal system of housing
advice and support for everyone who needs it which should offer
individuals a range of meaningful options. This should be the
case in general but the need for such a system is even more pressing
in current circumstances.
— Government must also ensure that
sufficient advice on financial issues is available and that people
are able to access credit at reasonable rates, whilst ensuring
lending practices are responsible. This should be accompanied
by a crackdown on unscrupulous lending and other practices which
can take advantage of those in vulnerable situations.
HOUSING AND
THE CREDIT
CRUNCH: THE
ISSUES
Housing Demand and Supply
1. Official predictions for household growth
suggest that there will be over 220,000 new households a year
until 2026, with 70% of these being single households.[52]
There is also an increasing demand for social housing. In 2007,
1.6 million households, around four million people, were on the
social housing waiting lists. That number is predicted to rise
to some two million households by 2010, that's five million people
waiting for a social home.[53]
This is without taking into account the likely increase in demand
due to the current crisis.
2. In particular, as the demand for social
housing has increased, so the supply has withered. In 1979 we
had a social housing stock of 5.5 million; by 1996 the figure
was 4.2 million, a drop of 1.3 million homes.[54]
Most of this decrease was as a result of right to buy sales[55]
with the stock not being replaced. Since 1986 the numbers of new
social housing units being completed has not exceeded 40,000 a
year and for the last 10 years the number has hovered around the
20,000 mark.[56]
3. In 2007, to help tackle this long term
undersupply of housing, the Government committed to building three
million homes by 2020, along with a target for a 50% increase
in the number of new social homes by 2010-11. We welcomed these
targets, however, in the current climate it is becoming increasingly
clear that, without significant extra investment, particularly
by Government, they will not be met.
4. Recent predictions suggest the number
of houses completed this year will be well short of the Government
target[57]
and this was before the full effects of the economic downturn
were really felt. There has already been a staggering 67% drop
in the number of private house-builders applying to start building
new homes this year compared with the same time last year.[58]
5. The economic downturn is also having
a significant impact on the supply of new social housing. In recent
years, much new social housing has been funded by Section 106
agreements as part of private developments; by RSLs borrowing
money; or by RSLs cross-subsidising social housing by selling
houses on the open market. In the current financial climate, all
three of these options are under serious strain and do not look
likely to deliver the required new social housing. The current
model for building significant numbers of new social housing is
therefore broken but this cannot mean we stop building social
housing, particularly at a time when more people will become reliant
on the sector.
6. It is crucial that Government sticks
to its house building commitments, plays a more active role in
the housing market and brings forward resources for development.
Now more than ever is the time to build to take up the slack in
the construction industry and meet ever growing demand. This can
only be achieved by the Government and its agencies taking a more
activist approach and allowing local authorities to do likewise.
7. There are opportunities as well as challenges
in the current economic climate. Government could, for example,
buy up unused land from developers and bring forward money for
developing this land and constructing new housing.
8. The new Homes and Communities Agency
in particular needs to make bringing forward new social housing
in innovative ways a priority, though this may well also require
additional resources from Government.
Rise in Repossessions
9. As well as the acute pressures on housing
demand and supply and the extent to which they are exacerbated
by current economic circumstances, we must of course deal with
the immediate crisis of the dramatic jump in repossessions. In
the second quarter of 2008, there was a 71% increase in repossessions
on the corresponding period last year.[59]
It is predicted that there will be around 45,000 repossessions
by the end of the year[60]
and there are over 310,000 mortgages in arrears.[61]
Private Rented Sector
10. However, it is not just homeowners that
are being affected. The economic downturn is also hitting the
private rented sector. Banks have been withdrawing affordable
buy-to-let mortgages and the number of buy-to-let landlords being
repossessed in the first half of 2008 is double that of the first
half of last year.[62]
When landlords are repossessed their tenants are evicted and we
must ensure there is support for these people too.
11. The problems of those struggling in
the private rented sector to meet their living costs also look
likely to increase. Rents in the private rented sector have risen
steeply in recent years. In the South East, rents rose by 83%
between 1996 and 2006.[63]
According to a recent poll, almost a quarter of those in the private
rented sector spend more than 50% of their income on rent and
25% are struggling to meet housing costs. This is higher than
the 7% of those with mortgages who are struggling[64]
and, in the current climate, there is also a risk that there will
be a further sharp rise in rents, putting more pressure on already
stretched tenants. It is crucial therefore that we provide assistance
to people who are renting and at risk of losing their home as
well as to homeowners.
Government Action on Repossessions
12. Crisis welcomes the Government's recent
moves to introduce new court protocols and guidance on the steps
that lenders are expected to take before bringing a repossession
claim to court.[65]
Repossession should only ever be a last resort. We also welcomed
the £200 million mortgage rescue package when it was announced
in September. However, we do not believe the current measures
go far enough and many of them still need the details worked through
before they can be implemented.
13. Whilst we were pleased to see the Government
acting to prevent some 6,000 repossessions across England, this
will be only a small proportion of the overall total and barely
scratches the surface.
14. Additionally, the measures announced
in the mortgage rescue package will only help those who already
qualify for homelessness assistance[66]
and so will exclude large numbers of homeowners, particularly
singles and couples without children, who are amongst the main
groups affected by the current crisis. The Government is right
to state that "for those affected, being repossessed is a
major life trauma".[67]
It is crucial therefore that every possible assistance is afforded
to all those at risk of being repossessed. We must try to enable
as many people as possible to stay in their own homes.
15. The Government recently took action
and invested significant amounts of taxpayers' money in bailing
out the banks and it is therefore particularly unacceptable that
these same banks are taking forward so many repossessions.
16. Government must also address the problems
facing those renting in the private sector and ensure that for
all people, whether homeowners or renting, there is a genuine
safety net of support and assistance from their local authority
if they do become homeless.
17. Crisis would like to see a specific
legislative provision introduced so that all landlords and creditors
are required to notify the relevant local authority when they
raise repossession proceedings or serve other notices. This would
alert local authorities to households at risk of homelessness
and enable them to respond to prevent homelessness. This provision
is already included in Scottish homelessness legislation and is
due to come into force next year.[68]
Homelessness Assistance
18. Because of the way homelessness is defined
and the way social housing is rationed in England and Wales, many
vulnerable people are not entitled to assistance from local authorities.
Every year, around 40,000 households are officially recognised
by their local authority as being homeless but are not provided
with any accommodation because they are not considered to be in
priority need.[69]
This is just the tip of the iceberg, we estimate that there are
already tens of thousands of hidden homeless households.
19. All local authorities are supposed to
provide "meaningful advice and assistance" to those
homeless households who approach them. However, we know that too
many homeless people are still being turned away from local authorities
with nothing. Under the terms of homeless legislation in England,
it is still only those who are considered in priority need and
meet other tests that are entitled to housing assistance from
their local authority (unlike in Scotland where all homeless households
are entitled to accommodation).
20. We need therefore to look at the rights
an individual has to homelessness assistance and the duty a local
authority has to provide it, as well as the application of those
rights and duties particularly at this time of housing insecurity.
Advice and Assistance for All
21. Crisis believes local authorities should
have a new duty to take meaningful action to prevent all people
from becoming homeless and to assist all who are homeless, which
must move beyond the current statutory provision. We would like
to see a new duty to prevent the homelessness of all. This duty
should apply to all local authorities and require them to proactively
work to prevent the homelessness of all people who approach them,
not just those they currently have a statutory duty to, and to
do so earlier than the current 28 days provision ie two months
before someone loses their home. It should also include a responsibility
to provide temporary accommodation for particular groups in immediate
need, such as those faced with no alternative but to sleep rough,
not just those in "priority need".
22. We need to move beyond the current system
of very limited advice and assistance and we believe local authorities
should provide proper, universal advice and support services to
those at risk of repossession or homelessness, those struggling
with housing costs and all in housing need. This service should
offer a range of options and advice, ranging from assisting people
to stay in their current homes, to offering people a social tenancy
to helping people find accommodation in the private rented sector
including by providing a private rented sector access scheme which
is open to all.
23. Such a service would have immediate
benefits for those facing homelessness in the short term but it
would also have benefits in the longer term by assisting people
to access the type and tenure of housing that is right for them.
Greater provision of such advice may well have prevented many
of those who have got into trouble from doing so in the first
place by diverting them into housing options more appropriate
to their personal and economic circumstances.
24. Government must make more financial
advice available for those struggling with debt, and indeed for
all those worried about meeting their housing costs or the rising
cost of living. As well as taking moves to ensure people can access
credit at reasonable rates and that lending practices are responsible.
This is necessary to address both immediate need and the longer
term underlying issues.
25. The Government must also take action
to crackdown on unscrupulous lending, loan sharks and to better
regulate sale and rent back schemes, all of which can take advantage
of individuals in vulnerable situations. We welcomed the Office
of Fair Trading's report on sale and rent back schemes[70]
and urge Government to now act speedily on its recommendations.
Seizing the Opportunity for Long Term Reform
26. Government must deal with the immediate
housing crisis but must also ensure that this is not an excuse
for putting longer term reform on the back burner. It is more
important not less to address some of the long term problems,
demands and issues facing out housing system as well as immediate
pressures.
27. As well as stepping in to build more
social housing in innovative ways for singles and families, Government
must also offer new options for intermediate renting not just
shared ownership schemes.
28. As explained above, we need a new system
of universal advice and assistance for all on housing issues;
new duties and responsibilities on local authorities to prevent
homelessness, including a wider homelessness safety net; greater
integration between housing and work advice and concerted action
to tackle all forms of homelessness.
29. There must be a better deal for those
who fall between the social and owner-occupier sectors, many of
whom are society's forgotten poor. This is a group which is in
real need and is too often ignored. They are unlikely to ever
be in a position to buy but at the same time they are not eligible
for social housing.
30. There needs to be advice and assistance
for renters, reform of the private rented sector and reform of
Housing Benefit. In particular, we welcomed the recent review
of the private rented sector by Julie Rugg and David Rhodes and
call on the Government to implement its recommendations.
CONCLUSION
31. We believe that the measures outlined
above should help to prevent what we otherwise expect to be a
sharp increase in homelessness. In the current economic downturn,
we are well aware of financial constraints and pressures on public
expenditure but, with repossessions and unemployment soaring,
Government action in the housing sector must be a priority.
32. Government must do everything possible
to prevent people losing their homes and becoming homeless and
to stop the financial crisis turning into a human one. It must
also recognise the need to play a more activist role and step
in to increase the supply of new social housing to tackle both
growing immediate need and historic undersupply.
33. At the same time, Government should
not put off radical reform and instead use the opportunity to
expand the current system of very limited advice and assistance
on housing, housing options and homelessness prevention and resolution
and to reform the housing system more widely such as by taking
forward the review of the PRS and comprehensively reforming the
system of Housing Benefit.
34. As the economic downturn takes Britain
into a recession, we are concerned that increasing numbers of
homeowners and people renting privately will be facing the prospect
of homelessness. This will only add to the already high levels
of demand for social housing and other homelessness services.
As well as addressing the needs of those being made homeless now,
it is equally critical that we do not forget those who are already
homeless, who risk being left even further behind.
ABOUT CRISIS
Crisis is the national charity for single homeless
people. We are dedicated to ending homelessness by delivering
life-changing services and campaigning for change.
Our innovative education, employment, housing
and well-being services address individual needs and help people
to transform their lives.
We are determined campaigners, working to prevent
people from becoming homeless and advocating solutions informed
by research and our direct experience.
We have ambitious plans for the future and are
committed to help more people in more places across the UK. We
know we won't end homelessness overnight or on our own. But we
take a lead, collaborate with others and, together, make change
happen.
Housing
Crisis develops innovative solutions that help
people into homes they can call their own.
Excluded from social housing, the private rented
sector is the only solution for many single homeless people. We
work with partners across the UK to deliver Crisis SmartMove,
a rent deposit and advice scheme, which has helped over 10,000
single homeless people into a new home. We are also making the
social and financial case for greater use of the private sector
and run a national advisory service for local authorities and
others setting up and running schemes across the UK.
We are also determined to realise our vision
of a supportive housing model which combines affordable housing
for low income workers and formerly homeless people with client-centred
support and vocational services. We continue to explore ways of
achieving this ambition.
Education and skills
Homelessness deskills and isolates. Equipped
with new skills people can regain control of their lives, raise
their aspirations and break the cycle of homelessness.
At Crisis Skylight, our inspirational learning
and activity centres, we offer practical and creative workshops
including art, music and drama, vocational workshops such as plumbing
and carpentry and accredited learning opportunities in literacy,
numeracy, IT and ESOL.
We see success every day as people gain confidence
and skills then move on to further education, training or employment.
Our ambition is to open Skylight centres in more cities across
the UK over the next five years.
Employment
Crisis provides vocational opportunities and
tailored employment programmes to help homeless people find and
keep jobs.
Our popular Skylight cafes are successful social
enterprises that offer accredited training and an opportunity
to gain work experience in a busy commercial environment.
Crisis Changing Lives, our highly successful
national award scheme, helps homeless people achieve their educational
and vocational goals by awarding grants of up £2,500 to pay
for training courses, tools and equipment or to help people set
up their own businesses.
Health and well-being
Homeless people face significant barriers when
trying to access high quality healthcare. Many also battle with
physical and mental health issues which prevent them from fully
benefitting from the opportunities we provide. To address this
we run workshops such as Yoga, Tai Chi and Pilates to improve
physical health and are piloting a mental health scheme which
we plan to roll-out across our new Skylight centres. We also provide
links and guidance to appropriate health services.
Christmas
At Christmas we run temporary centres that provide
shelter for those sleeping rough and companionship and support
to the vulnerably housed. The centres also provide life-changing
services to help people to take their first steps out of homelessness
and link people up to year-round support and opportunities. What
makes our work possible is the help of thousands of volunteers
and donors who generously give their time, energy, money and skills
each Christmas.
Campaigning for change
We are determined to prevent people becoming
homeless. We combine a research-based understanding of the causes
of homelessness with direct experience of helping individual homeless
people transform their lives. We advocate solutions based on evidence
and argue for improved services for single homeless people.
How we help to transform lives
It is the hard work and commitment of thousands
of volunteers that allows us to change people's lives. We are
fortunate in our capacity to call on the support of thousands
of volunteers. We plan to harness this support more effectively
as we grow, including a mentoring programme which matches homeless
people to volunteer mentors and coaches. We are also grateful
for the support of 66,000 individuals and many companies, trusts
and other organisations which fund our work through donations
and grants.
November 2008
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52
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53
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54
CLG (2008) Housing and Planning Key Facts. Back
55
Hills J, Ends and Means (February 2007) The Future Role of
Social Housing in England. Back
56
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57
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58
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59
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60
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61
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62
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63
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64
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65
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66
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67
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68
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69
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70
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