Priced out onto the streets

In a recession more people are homeless. Official levels of homelessness in England have increased by 16 per cent in the last year.

These government statistics are only part of the picture. Only people who have contacted local authorities and who have children or are vulnerable in some way, and who did not become homeless "intentionally," are counted.

Able-bodied childless adults are not included because councils have no obligations to help them.

Ascertaining true levels of homelessness is an impossible task. Government statistics show that about 2,000 people are sleeping rough in England on any given night, a huge increase of 23 per cent from the previous year.

The numbers of households living in overcrowded conditions is also increasing.

However not everyone turned away by local authorities ends up sleeping rough.

Most stay with friends, relatives, return to their parental home - if possible - and manage to tide things over until they obtain the right to a roof over their head.

Those are the hidden homeless. Some are healthy and can make do. Others may have illnesses, such as depression, which councils regard as not serious enough to make them "vulnerable" - a technical legal term that is restrictively interpreted.

There may even be families with children whom councils have refused to help because they are considered to have brought about their own homelessness.

If the statistics show that formal homelessness is increasing, informal homelessness will be accelerating faster.

Three housing organisations - Shelter, the Chartered Institute for Housing and the National Housing Federation - have started to monitor the government's performance in housing. They publish a report every six months.

The best news for the government from the most recent report is that the number of empty homes is falling, from an appalling high of nearly 80,000 to 72,000 - which is still far too many - and that repossessions are falling.

Repossessions are likely to rise again when interest rates go up. The report slams the government on everything else - not building enough homes, overcrowding and homelessness increasing, rents rising in the private sector and the frightening impact of cuts to housing benefit.

Twenty-ten and 2011 saw the fewest number of new homes built in England since 1946, particularly in the area of low-cost or affordable housing.

Without significant house-building, house prices rise. Average house prices in England are £233,203 and in London £368,049. Excluding London and the south-east, the average house price in England is £184,377 - nine times more than median gross earnings.

Quite simply, more and more people are priced out of owner-occupation. So they turn to the private rented market, where there is no security. Landlords are free to charge the highest rent that they can and the tenant will have to leave if she or he can't afford it.

As more and more people in work who would previously have considered buying are now renting, average rents rise, particularly in London.

Shelter calculates that a household needs a gross salary of £52,000 to afford a privately rented two-bedroom flat in London.

So London councils are now sending homeless families to rent in Stoke, Birmingham or elsewhere, where rents are lower.

Housing benefit rates have been cut. Housing benefit will only pay an amount equivalent to the lowest third of local average rents and is capped at a figure that would barely cover rents anywhere in London.

This means that at least two-thirds of private rented properties are out of reach to people claiming housing benefit - not just those out of work but also those on low wages.

If you lose your job or have your hours cut and need housing benefit, suddenly your rent becomes unaffordable.

The government says that lower housing benefit levels will bring down rent levels - citing supply and demand.

However tenants who are entitled to housing benefit are outnumbered by prospective tenants earning enough to pay higher rents, so rents escalate. Tenants on housing benefit can't compete.

That leaves the social housing sector, already seriously depleted. Since the 1980s, Tory and new Labour governments have treated social housing as the sector of last resort while at the same time rationing it, usually by creating scapegoats.

Twenty years ago, Tory minister Peter Lilley denounced "young ladies who get pregnant just to jump the housing queue."

These days queue-jumping immigrants are denounced, even though most recent migrants aren't entitled to social housing.

The number of social houses will diminish even more as a result of the government increasing the maximum right to buy discount to £75,000.

The government insists each house lost will be replaced. Housing finance professionals doubt this is achievable.

The government should think long and hard about encouraging households who are likely to be on low wages to buy.

There is no housing benefit for mortgage costs. If the new home-owner loses his or her job, there will be no help towards the cost of the mortgage payments.

At a time of increasing unemployment and insecurity, is it wise to encourage home-ownership to those at risk of default? We've become acutely aware of the personal cost of mortgage default and of the huge economic ripples as a result.

The rationing of social housing is now institutionalised. Councils can give new tenants short fixed-term tenancies lasting two or five years.

Tenants could lose their homes if at the end of the tenancy someone in the household is in work.

The government is consulting on charging higher rents to what it describes as high-income social tenants - those earning £60,000 or more a week.

There are very few such households - another bogus scapegoat promoted by the government - and the simple way of making them pay more is through tax, not means testing rents.

Homeless households accommodated by local authorities will no longer wait for an offer of a council or housing association home.

Later on this year, councils just have to find them private rented tenancies.

Critics predict a revolving door of homelessness as households given private rented tenancies find they can no longer afford the rent, are evicted and approach the council for help again.

In short there is a huge affordability gap. No-one earning the average wage can afford to buy and many cannot afford expensive private rents.

Social housing is treated as a place of last resort and rationed. What do people who have no roof over their heads do?

Some sofa-surf or go from one insecure private tenancy to another. Desperate families with children generally wait in temporary accommodation, and adults without children might sleep rough.

Rent controls would reduce the cost of private rents, making the private rented sector affordable to more people.

Cheaper private rents would bring down the housing benefit bill - the opposite of the government's logic that restricting housing benefit will bring down private rents.

If more people are happily renting then there will be less demand for home-ownership and prices might actually fall.

The government could enforce measures to prevent landlords keeping homes empty through the compulsory purchase of some of those 72,000 empty homes.

Affordable private rents would mean less demand for social housing and less need for appallingly divisive systems of rationing it.

Rent controls aren't a panacea. We also desperately need more houses built, particularly more social housing. But rent controls would go a long way to combating the immediate crisis.

Liz Davies is a barrister specialising in legal aid housing law. She is chairwoman of the Haldane Society of Socialist Lawyers (www.haldane.org) and writes this column in a personal capacity.