Written evidence submitted by London Borough of Tower Hamlets [IOC 245]
This submission is put forward by London Borough of Tower Hamlets. The views contained reflect the experiences of our services and the local challenges of service delivery to a population of around 320,000.
Overview of key asks covered in this submission
a national database to monitor evictions in the private rented sector.
Background information
Local housing challenges in the London Borough of Tower Hamlets include a lack of affordable housing and council homes and a high incidence of homelessness and rough sleeping. Increasing numbers of families are living in overcrowded housing or in temporary accommodation. This is set against a backdrop of an overheated housing market and the highest new housing target in London.
Local housing need
Tenure
Homelessness and rough sleeping
Rough sleepers and homeless people
On 17th March the Government announced £3.2m initial emergency funding for local authorities to provide accommodation to rough sleepers or those at risk of rough sleeping. On 19th March, the Government announced £1.6bn for local authorities to relieve coronavirus pressures across all services, including adult social care and services helping the most vulnerable. On 18th April, the Government announced a further £1.6bn for local authorities to manage their new responsibilities, noting that over 90% of those known to be on the streets and in night shelters at the beginning of the crisis have been offered safe accommodation.
Tower Hamlets has been awarded £12,750 from the Coronavirus (COVID-19) Rough Sleeping Contingency Fund. As of 24th April 2020, the borough has accommodated 104 verified rough sleepers as part of measures to prevent the spread of coronavirus. This includes people with No Recourse to Public Funds (NRPF) and those without a local connection to the borough. Those at risk of rough sleeping are reported by our homelessness service as having increased during the emergency period. To date Tower Hamlets has procured 120 units of accommodation for rough sleepers at a cost of roughly up to £70 per night per unit where meals are provided. On-site and floating support staff are added costs that are keeping the hotels open and generally safe.
Most of the verified rough sleepers have been accommodated in commercial hotels. Hotel accommodation has been procured by the borough at considerable expense due to insufficient supply in the borough’s existing emergency accommodation portfolio. Rough sleepers’ unwillingness to accept out-of-borough accommodation and the need for access to local support agencies militated against procuring in less expensive parts of London. Half and full board costs have also been incurred to provide food since much of the client group are not claiming benefits or have lives too chaotic to pursue claims. On-site and floating support to sustain hotel placements and assist hotel staff unfamiliar with this cohort has required an additional outlay of £34.4k. As of 24thApril we have accommodated 29 rough sleepers and 5 homeless people at risk of rough sleeping in hostels who have NRPF or unclear status, whose subsistence costs we are also bearing. These are single people who would not normally have been assisted by social services.
The risk of coronavirus spread to residents in homeless hostels with shared facilities is a serious concern, and guidance is needed on supporting people in hostels with shared facilities. The complex needs and physical vulnerabilities of people residing in homeless hostels has also warranted guidance. Lack of official advice has been challenging with respect to non-compliance with social distancing and self-isolation measures in hotels and hostels. Staff are unable to stop people from freely entering and leaving buildings, placing themselves and others at risk. A team of dedicated officers are working to mitigate the risk of an outbreak, alongside dealing with matters such as medical triaging, scripting, PPE, hospital discharge, and food and subsistence provision for homeless people. Guidance is needed across all the above issues – the Government’s ‘Guidance for hostel or day centre providers of services for people experiencing homelessness’ was issued in March but withdrawn.
While emergency funding is enabling the borough to accommodate those with NRPF, the Home Office has not relaxed restrictions on accessing state benefits. The borough is therefore incurring additional costs when financial support is needed by this cohort. The Government could remove current restrictions on state benefits, or release funding to ensure the health and well-being of those with NRPF.
We have seen a slight decrease in families and single people becoming homeless or at risk of homelessness in the five weeks since lockdown began, compared to the five weeks before lockdown started. The number of people made homeless due to domestic abuse has remained the same, using this before and after comparison. Of the single people, a number of prison release clients have approached us directly rather than being referred through the normal channels. We have also had unverified rough sleepers presenting to us from neighbouring boroughs. Most homelessness since the lockdown has been due to being asked to leave by friends or family. Further case record analysis would be required to establish where Covid-19 had been a specific factor.
Private renters
On 27th March the Government suspended both new and ongoing eviction proceedings for 90 days for private tenants. The notice period for possession has been extended to three months, in place to 30th September. The new Guidance asks landlords to show compassion in this challenging time and to allow tenants to remain in their homes wherever possible. Landlords and tenants are encouraged to come up with an ‘affordable repayment plan’ where tenants are having difficulty making rental payments and fall into arrears. Private renters struggling with housing costs may be able to access financial support through the job retention scheme - where furloughed employees receive up to 80% of income - or through accessing benefits. However though Universal Credit and Housing Benefit have increased since April 2020, there is still a shortfall between welfare support and median rents in Tower Hamlets (see below), and delays to benefit mean that many renters are unable to make their monthly rental payments.
While the measures introduced thus far are welcomed, our experience has been that the response has not gone far enough, with many renters still unable to afford their rent - as the financial support does not cover housing costs - and fearful of eviction when the current suspension of eviction proceedings comes to an end. Asking landlords and agents to show compassion leaves things too open ended and asking renters to negotiate with their landlord on rental payments leaves them at the mercy of their discretion.
Our private housing advice team and local voluntary sector partners have seen a significant increase in renters approaching them for advice and mediation – from 25th March to 24th April the borough’s private housing advice team have had over 100 new approaches. Key issues include private tenants unable to pay rent due to loss of income and a marked increase in queries linked to security of tenure. Our private housing advice team have seen at least 10 cases where tenants have experienced harassment or threats of eviction due to loss of income and in some cases tenants were harassed in response to a request for a rent deferment. Private tenants have reported difficulty speaking to their landlord or agent about a rent deferment.
While homeowners and buy-to-let landlords can take advantage of government-mandated mortgage
Holidays, renters remain liable for their rent throughout the crisis. The current provisions do not
do enough to ensure that these payment holidays are passed on to renters – currently, there is no duty to inform renters or management agents if their landlord has taken a payment holiday.
Homeless people and rough sleepers
Local authorities are already stretched following the period of austerity impacting on all services. The current pandemic and economic uncertainty will further drain the borough’s purse. At present there are competing pressures within each local authority intensifying as the current pandemic continues.
Of the initial £1.6bn for local authorities in England promised on 19th March, Tower Hamlets received £10,448,682 to be used across council services, predominantly adult social care and children’s services. Of the second tranche of funding announced on 18th April, Tower Hamlets has been allocated £8,999,802 for use across council services.
As the crisis looks set to continue for many months, we urgently need more direct funding for homeless people and rough sleepers. The 2020/21 Rough Sleeping Initiative funds will not be sufficient. Additional funds would enable the borough to provide accommodation and support for rough sleepers and all homeless people through the current emergency. Not doing so could present a homelessness crisis and serious risk to public health if people are unable to self-isolate when they need to.
Private renters
At least 40% of Tower Hamlets residents are private renters. The current crisis has underlined the precariousness of their situation. Four in ten households in Tower Hamlets live below the poverty line. Many renters have little or no savings and many have had to reduce or stop work due to the pandemic leaving them unable to afford their rent. The measures introduced to support renters will not be enough to prevent many households falling into financial hardship over the coming months.
The Office for Budget Responsibility estimates up to 2.1 million people could lose their jobs in the second quarter of this year, with the biggest increase in unemployment among the lowest-paid workers. A poll undertaken for Shelter by YouGov found that an estimated 1.7 million adults nationwide expect to lose their jobs in the next quarter, while one in four say that losing work will leave them unable to pay rent. Six in 10 renters nationwide (Guardian/Opinium) said they had suffered financially as a result of the UK-wide lockdown. Of those, one in five had been forced to choose between food and bills or paying rent.
The issues presented nationwide are expected to be acute in Tower Hamlets. As unemployment rises and incomes fall, people who were just about managing before will face financial hardship, unable to afford rent and vulnerable to eviction and homelessness or forced to choose between essentials and rent.
Even before this pandemic, Local Housing Allowance (LHA) was out of step with median rents in Tower Hamlets. The new LHA rates to median rents in Tower Hamlets still show shortfalls ranging from £57 a month for someone in 1 bedroom in a shared property - up to a £163 shortfall a month for a 4-bedroom property. Where people are only going to receive 80% of their income, or only be entitled to statutory sick pay or Universal Credit they will see their income drop.
The Government must increase welfare support to reflect local circumstances to mitigate the risk of private renters struggling to meet their housing costs – this means suspending the Benefit Cap, uprating LHA to median market rents, increasing the housing element of Universal Credit, and covering any shortfall in rental payments of private tenants unable to pay them so that they do not accumulate arrears.
The five-week wait for a first Universal Credit payment can leave renters struggling to pay monthly rent. Across the country, many Universal Credit claimants have taken up advance loans to see them through the five-week wait. Recipients must pay back loans back at a rate of 25% of their standard Universal Credit allowance until the debt is cleared. The Government could scrap the five-week wait for Universal Credit or replace the loan system with a cash grant to avoid exacerbating the financial difficulties claimants face.
Prior to COVID-19, six in ten children in Tower Hamlets were in poverty, with housing costs a major contributor to child poverty (Trust for London). Currently households with three or more children do not receive financial support for any additional children born after April 2017. Tower Hamlets has many large family households from BME communities. The Government could drop the two-child limit on benefit payments to avoid increasing child poverty and to ensure that renters with large families can stay safe and secure in their homes.
Asking renters to negotiate rent deferments or rent payment arrangements leaves them at the mercy of landlords or agents’ discretion and vulnerable given the power imbalance that exists within private renting. The Government must urgently bring into force the end to section 21 “no-fault” evictions to prevent retaliatory evictions in response to a request for rent deferment or rent payment arrangement.
The Government could do more to ensure landlords and agents are flexible on rent payment and keep tenants informed. Homeowners and buy-to-let landlords can take advantage of government-mandated mortgage holidays, yet renters remain liable for their rent throughout the crisis. The current provisions do not ensure that payment holidays are passed on to renters – currently, there is no duty to inform renters or management agents if the landlord has taken a payment holiday.
Our private housing advice team have reported that letting agents are making demands for rent payments where renters have experienced a sudden drop in income, and some agents appear unclear on their role or the support measures available to them. Guidance would be useful to clarify responsibilities and sources of support were there are three parties are involved in the private tenancy - landlord, agent and tenant.
There are concerns about unlawful eviction in a context where resources are stretched. The borough can refer residents subject to unlawful eviction and eligible for legal aid to solicitors who apply for injunctions to reinstate their tenancy. However, many tenants are not eligible for legal aid. The Government could introduce a special fund to cover the legal costs of private renters subject to illegal eviction. A review of fines for landlords prosecuted for illegal evictions could also act as a deterrent.
Rough sleepers and homeless people
Tower Hamlets has concerns about the medium and long-term housing of rough sleepers when the threat of coronavirus recedes. If placements come to an end this cohort will return to the street. Those who are homeless, including those with NRPF, have no means of paying for accommodation post-lockdown and are at risk of long-term homelessness. The Government could commit to ensuring that support for rough sleepers and homeless people remains post-lockdown to prevent these groups from returning to the streets or becoming long-term homeless. The ‘Everyone In’ directive to place rough sleepers in secure accommodation could be a step toward meeting the Government target of eliminating rough sleeping by 2027.
Our support services have an opportunity to work with rough sleepers to prevent a return to rough sleeping post-lockdown. To use this opportunity, additional funds are needed to support and rehouse rough sleepers as the 2020/21 Rough Sleeping Initiative funds will not be sufficient and local authorities cannot provide this support when finances are already stretched.
The Government could bring forward future earmarked financial assistance to reduce rough sleeping now. This would help local authorities and their partners in the voluntary sector to prevent a return to rough sleeping post-lockdown. Government funding for specialist support provision - such as mental health, drug and alcohol support – is also urgently needed to prevent existing rough sleepers from returning to the streets.
Private renters
We face a ticking timebomb of debt, arrears and widespread evictions post-lockdown once the suspension in possession proceedings is lifted. The Government must address the financial impact of the crisis on renters and put in place long-term protections to prevent homelessness post-lockdown. Measures to protect renters are vital to limit the impact of rising homelessness to council services.
In Tower Hamlets, the shortfall between median rents and average incomes is particularly acute, and renters unable to afford their rent due to the financial pressures brought by the crisis are accumulating debt. A surge in evictions due to rent arrears could begin in July and continue through the rest of this year if the current suspension on eviction proceedings is not extended. The Government can prevent evictions and homelessness through extending the suspension of possession proceedings to at least 30th September 2020 and crucially, by preventing evictions for rent arrears under section 8.
The Government could prevent evictions for rent arrears under section 8 by introducing a grace period in which tenants may pay back arrears or relieve debt by wiping arrears accumulated in the emergency period, with landlords able to claim back the lost money from the Government. Local authorities could also be enabled to clear rent arrears through a significant increase in the Discretionary Housing Payment (DHP) allocation and greater freedom in the DHP rules to pay arrears where benefits have already been paid out but the tenant failed to pay the rent.
Legislation to end section 21 “no-fault” evictions must be brought forward quickly as renters are vulnerable to “revenge” evictions should they try to negotiate rent payment arrangement with their landlords. Section 21’s use as means of retaliatory eviction has been well documented by Citizens Advice and Shelter.
Our service has been supporting private renters who have received threats of illegal eviction. We have concerns of an increase in illegal evictions post-lockdown. The Government could help prevent illegal evictions through strong messages to landlords, a review of fines for landlords prosecuted for illegal evictions, and by issuing guidance to improve police response to illegal evictions.
A national database to record evictions could help monitor the impact of the crisis and the new emergency measures on the private rented sector. The Government could also work with the National Residential Landlord Association and renter advocacy groups to ensure clear and coordinated support to landlords and renters.
Further, legislation to limit rent rises in the private rented sector would minimise financial hardship and help private renters to stay in their homes at this time of crisis and uncertainty.