London Councils calls for end to LHA freeze to prevent almost 60,000 becoming homeless

The research suggested that restoring LHA to cover at least 30 per cent of local market rents would save the public finances in London more than £100m each year.

The majority of these savings would come from reduced pressure on London boroughs’ homelessness services, but also from lower costs to other parts of the public sector such as the NHS and social care.

London Councils has urged the government to end the freeze on LHA. The policy measure is one of the group’s top priorities in its submission to the government’s upcoming Autumn Statement.

London accounts for more than half (57 per cent) of England’s total number of homeless households in temporary accommodation.

In August, London Councils found that almost 170,000 Londoners are currently homeless and living in temporary accommodation arranged by their local authority. This is equivalent to around one in 50 Londoners overall and one in 23 children in the capital.

Boroughs have warned that the situation is “increasingly unmanageable” and that they are set to overspend their homelessness budgets by £90m this year.

London Councils said that turbulence in the capital’s private rented sector is a “critical factor” behind the growing numbers of homeless Londoners.

Research from the group and partners, published in July, revealed a 41 per cent drop in private rental listings in the capital since 2020, while listed rental prices rose by 20 per cent.

Only 2.3 per cent of London listings on Rightmove in 2022-23 were affordable to those using the benefit to pay their rent, a drop from 18.9 per cent in 2020-21.

This comes after 119 council leaders signed a letter asking the government to take “urgent” action as the temporary accommodation crisis worsens and threatens their financial viability.

And housing bodies have called on the government to “urgently reconsider” the home secretary’s “punitive” proposals to ban tents, if it wants to “prevent people from dying” on the streets.

Darren Rodwell, executive member for regeneration, housing and planning at London Councils, said: “Raising Local Housing Allowance is vital for getting a grip on the homelessness crisis.

“London’s homelessness pressures are already enormous and unsustainable. On current trends, almost 60,000 more London renters are set to become homeless in the coming years.

“London is the epicentre of the national homelessness crisis. The situation is increasingly unmanageable and requires urgent government action. We cannot continue in this disastrous direction.

“Just as the government boosted LHA during the COVID-19 pandemic to prevent a wave of mass homelessness, we need a similar emergency response to the situation today. An increase in LHA will help low-income households pay their rents and avoid homelessness, which can be so devastating to families and bring massive costs to local services.”