London Councils and temporary accommodation

London Councils Executive Committee will tomorrow receive a paper seeking their views on a range of measures to improve the Inter Borough Temporary Accommodation Agreement (IBTAA) so as to ensure that it is more transparent, effective and enforceable. The report notes that with increasing levels of homelessness coupled with a decline in affordable private rented accommodation in London, coinciding with a range of changes to the welfare system, the trends have revealed that there has been an increased volume of the overall number of placements across London. Over 2012/2013, there were 3,352 placements, compared to 2,449 in the previous year, highlighting a significant upward trend (these figures do not account for households that moved back to their home borough). Out of London placements also increased, from 120 households Q1 in 2012/2013 to 176 households in Q2 in 2012/2013.

However, monitoring data strongly suggests that some boroughs (where there is a higher supply of private rented stock at or below the housing benefit cap) are receiving a disproportionate number of families compared to other boroughs whose supply of affordable private rented housing at or below the cap level has sharply declined. Secondly, unsubstantiated reports have been made about incentives being paid to landlords. This is of concern to boroughs who feel they are being priced out of their own housing market and the impact this is having on rents overall in individual market areas and across London as a whole.

More generally, the report says the number of placements needs to be viewed in the context of a deteriorating private rented sector and highlights a number of distinct challenges ahead, including:

* Sustained increases in London rent levels are contributing to diminishing supply. There is evidence that landlords are switching to a nightly let regime which is more financially lucrative for them.
* The impact of welfare reform is likely to see more than 27,000 households in London impacted by the benefit cap (DWP estimates) leading to some families having to move home in search of cheaper properties (impacting sooner for 4 borough pilots).
* The ‘bedroom tax’ proposals will affect potentially up to 80,000 households in London (DWP impact assessment) which will see families seeking to move to smaller properties.

The report recommends a number of tweaks to the working of the IBTAA scheme, and goes onto ask whether now is an appropriate time to explore a more ambitious pan-London approach which could address the increasing demand for private rented accommodation within (and possibly) outside of London, whilst finding ways to support the increasing need for affordable good quality private sector accommodation.

The feasibility of setting up a London wide lettings agency, which would independently procure accommodation on behalf of boroughs in the private rented sector could be explored. This would look at whether cost benefits and economies of scale could be achieved. Depending on the agreed nature of the scheme, landlords could be provided with rent guarantees and other benefits in return for providing good quality accommodation at affordable rents.

For the full report, see Item 5 - Strengthening the Inter-borough Temporary Accommodation Agreement