Housing is a very broad term, and this article does not intend or pretend to cover all that is relevant in this field. It does however seek to give a flavour of the position we find ourselves in now and what is being done and likely to be done to improve matters.
By Andrew Lane, Barrister, Cornerstone Barristers
Where are we now?
There can be little doubt that this country is in a housing crisis and has been so for many years. This is clear from even a cursory look at some of the figures released by the Ministry of Housing, Communities & Local Government (“MHCLG”) on 3 and 30 October 2024:
- 358, 370 households homeless, an increase of 10.4% on the previous year
- 146,430 households threatened with homelessness and so owed the prevention duty,[1] an increase of 3.1%
- 117,450 in temporary accommodation, an increase of 12.3%
- 74,530 households with children in temporary accommodation, up by 14.7%
- 8,309 people sleeping rough in June 2024 for at least one night, up 15% on June 2023
- 2,808 people sleeping rough longer-term in June 2024, up 22%.[2]
In December 2021[3] the National Housing Federation’s research estimated that there were around 8.5 million households with some form of unmet housing need and that for 1.6 million households social housing would be the most appropriate tenure to address that need.[4]
That recognises that the private rented sector, whilst a significant player in the debate, is not the answer to such unmet need, not least because of its high rent model and insecurity of tenure. That uncontroversial recognition is further exacerbated by restrictions to housing benefit and the housing costs element of Universal Credit since 2010.
The rising cost of the benefits bill led the Coalition Government,[5] in its June 2010 budget, to announce the bedroom tax and, 4 months later, the household benefit cap amongst other costs-saving measures. In 2011 the level of the local housing allowance (“LHA”) was reduced from the 50th to 30th percentile such that LHA would cover the lower 30% of rents in each area. The Conservative Government then, in July 2015, announced the freezing of LHA rates from April 2016 (a measure that continued until April 2024).
This not only effects tenants’ ability to fund their rents, but also local housing authorities’ ability to provide temporary accommodation pursuant to their homelessness obligations to be found in part 7 of the Housing Act 1996. The total costs of such placements increased in England from £1.14bn in 2018-19 to £1.8bn in 2022-23.[6]
The LHA freeze was especially significant (alongside the reduction of the percentile) as it sets the maximum amount of housing support claimants of Universal Credit and Housing Benefit can usually expect to receive for private rented homes of different sizes.[7]
This all puts greater focus back on the social housing sector which, between April 1980 and March 2023, had seen a loss of 2,020, 779 social housing dwellings through statutory Right to Buy, Voluntary Right to Buy and Preserved Right to Buy. Since its introduction in 1998 there have also been 12,748 sales of social housing through the Right to Acquire recorded by Homes England.[8]
Many Housing Ministers liked to announce their wish for 1:1 replacement but the reality is that right to buy has caused the social housing sector to shrink. The House of Lords Library noted in June 2022 that over 40% of former council homes were now in the private rented sector.[9]
What can we expect to happen?
Timing is important in so many spheres of our lives, but I must confess to having been fortunate in my choice of subject-matter being accepted for this article when we not only have the long-awaited Renters’ Rights Bill been introduced into Parliament on 11 September 2024,[10] but the first Budget of the new Labour government on 30 October 2024 highlighting several significant housing reforms and funding commitments.
The Renters’ Rights Bill will clearly have a significant impact on the private rented sector and, to a lesser extent, the social housing arena as well. The much-trumpeted removal of “no fault” section 21 notices and process, and the greater focus and powers to be given to ensure better standards in the sector – such as a new decent homes standard, the extension of “Awaab’s” law to the sector and the introduction of a Private Rented Sector Ombudsman – are generally seen as positive and constructive moves.
In terms of the costs of the private rented sector then, unlike in Scotland,[11] rent controls seem very much off the table. Matthew Pennycook M.P., the Minister for Housing and Planning, said in a written answer in the House of Commons back in August:
“The Government does not support the introduction of rent controls. We have made clear that we intend to use the Renters’ Rights Bill to provide tenants with greater protections against unreasonable within-tenancy rent increases.”
Looking towards the social housing sector we saw the Chancellor, Rachel Reeves MP, commit to an extra £500 million in the 2025-26 Affordable Homes Programme as well as more immediate funding for house-building programmes such as in Liverpool Central Docks (2,000 homes) as well as more generally through the Local Nutrient Migration Fund (28,000 homes)[12].
The Chancellor also announced a 5-year social housing rent settlement, £233 million additional 2025-26 spending to tackle homelessness and reduction in right to buy discounts. The latter is especially topical as the Secretary of State for Housing, Communities and Local Government and Deputy Prime Minister, Angela Rayner MP, told the BBC in November 2024 that she also wanted to stop new council homes in England been sold under the Right to Buy Scheme.
Conclusion
My personal take on all this is that I get a sense of this government taking housing very seriously indeed, wanting to move quickly and, just as important, properly understanding the crisis it finds itself in.
That is not to say that everyone will be resolved overnight or even in the short to medium-term. For example, there are issues still to be talked about – for example, what is going to happen to the voluntary right to buy programme and how will housing associations and other private registered providers operate their starter tenancies with the ending of assured shorthold status and fixed-terms?
There are also the inevitable unknowns. Again, looking at my practice area of social housing will the government invest sufficiently in the courts system to ensure that hearings are held quicker, and warrants enforced in a reasonable fashion?
And finally, there is the real continuing problem of temporary accommodation costs for local housing authorities. On 24 October 2024 London Councils reported that London boroughs were spending £4million every day on such costs, and had a forecast overspend of £250m this year on their homelessness budgets. They are seeking a removal of the January 2100 cap on LHA payable for temporary accommodation in Housing Benefit subsidy, a doubling of the Homelessness Prevention grant funding and the LHA rates 2024-25 increase to be made permanent.
So watch this space! The public face of the previous administrations was not impressive in the housing arena and saw 16 Housing Ministers in the 14 years starting in 2010. Of course, it is too early to see whether that pattern will be continued but in Matthew Pennycook MP I believe we have a Minister who knows their brief and is genuinely interested in and committed to the area.
Andrew Lane, Barrister, Cornerstone Barristers
[1] Section 195, Housing Act 1996
[2] It was announced on 6 November 2024 that an emergency £10 million fund has been launched by the Deputy Prime Minister to protect rough sleepers from cold weather this winter.
[3] I have relied heavily in this article on the wonderful House of Commons Library Service, and in particular here on their 4 March 2024 Research Briefing “Social rented housing in England: Past trends and prospects”.
[4] “People in housing need – The scale and shape of housing need in England”.
[5] See the House of Commons Library Research Briefing of 17 August 2021 – “The rent safety net: changes since 2010” (Wendy Wilson, Francis Hobson and Roderick McInnes).
[6] Department for Levelling Up, Housing and Communities, Accredited official statistics – “Local authority revenue expenditure and financing England: 2021 to 2022 individual local authority data – outturn” (23 November 2023).
[7] House of Commons Library’s Research Briefing – “Local Housing Allowance 9LHA): Help with rent for private tenants” (Wendy Wilson, Francis Hobson & Rachael Harker).
[8] MHCLG accredited official statistics – “Social Housing sales and demolitions 2022-23: Right to Buy sales”, updated on 27 June 2024.
[9] “Right to buy: Past, present and future” (Frank Eardley).
[10] The similar Renters (Reform) Bill introduced by the previous Conservative government ran out of Parliamentary time upon the calling of the general election and it not being included in the ‘wash-up period’ allowing for bills to be passed in quick fashion before the July 4th election.
[11] See the Housing (Scotland) Bill. Conversely the Welsh Government has recently indicated that rent controls do not form part of its plans for the private rented sector.
[12] See 7 November 2024 MHCLG press release.
