Whether the next prime minister is Liz Truss or Rishi Sunak, the new leader faces an uphill battle to end the housing crisis. Image: Simon Dawson / No 10 Downing Street
Liz Truss by no means the first prime minister tasked with tackling the housing crisis. They may well not be the last. It’s a long list of issues to tackle and few prime ministers have come into a worse situation with record house prices and rents making housing unaffordable for millions.
There are fears that the affordability crisis – alongside the wider cost of living crisis – could lead to rising homelessness. In fact, there are signs that is already happening, with recent official figures showing a rise in evictions and the number of people contacting councils for help with homelessness.
As Shelter’s Polly Neate put it: “With homelessness on the rise whoever becomes the next prime minister needs to get a grip on this crisis, and fast.”
So, we’ve set out what Truss needs to address when it comes to housing. We’ve done the same for issues surrounding the cost of living crisis, the environment and levelling up.
Start to deliver the plan to end rough sleeping by 2024
The cost of living crisis, homelessness campaigners say, could undo some of the good work done under the Boris Johnson administration. The government won plaudits for its reaction to Covid-19 lockdowns, launching the Everyone In scheme to provide rough sleepers with a place to stay as the virus spread through the UK.
Official figures estimate the scheme reduced the number of people living on the streets, although the 2,440 people counted in autumn 2021 is still 38 per cent higher than in 2010. Homelessness services in England have reduced in that time, too. Homeless Link said this week there are 39 per cent fewer accommodation providers and 26 per cent fewer bed spaces than 12 years ago.
Truss will be expected to deliver on the Conservative manifesto promise of ending rough sleeping by 2024. For that, there needs to be a plan and the government has promised a rough sleeping strategy for some time.
That plan eventually arrived on Saturday with the government promising 14,000 beds and 3,000 support staff as well as 2,400 long-term homes alongside support for people with complex needs. That means the Housing First pilots in Manchester, the West Midlands and Liverpool will be extended, as will schemes to help prison leavers from falling into street homelessness.
The government will invest £500m over three years in the Rough Sleeping Initiative, out of the £2bn announced to tackle homelessness and rough sleeping at this year’s budget.
The long-awaited strategy has come at a time of great need. We are now at the “precipice” of surging homelessness, an open letter from homelessness groups warned last month, calling on the new prime minister to focus on prevention in their first days in charge.
“Both leadership candidates have barely mentioned homelessness throughout their campaigns,” said Homeless Link chief executive Rick Henderson.
“It’s vital that when parliament returns, our new prime minister acts decisively to prevent a wave of homelessness. We hope that this letter, and the weight of concern it demonstrates from across the homelessness sector, will put the issue of homelessness back on their agenda.”
Truss will also be under pressure to deliver on another Tory promise – axing ‘no-fault’ evictions. Also known as section 21 evictions, the mechanism allows landlords to evict tenants without giving a reason and has been cited as a leading driver of homelessness.
The government announced in June it would be scrapping them as part of the Renters Reform Bill. She must press on with getting the legislation through parliament at pace.
Private rents may need support in the interim to keep up with rising rents. Generation Rent has called for a rent freeze with director Alicia Kennedy, warning “renters are terrified, knowing they face a winter of destitution”.
Freeze social rents and set out a Social Housing Regulation Bill
There are pleas for social renters to be offered a freeze too. This week the Westminster government announced a consultation on the amount social housing rents will increase next April, capping rises at 3, 5, or 7 per cent to protect households from the cost of living.
Campaigners want Truss to go further, including activist Kwajo Tweneboa whose activism has put the state of social housing under the microscope over the last year.
Truss will also be expected to bring through the promised Social Housing Regulation Bill to improve standards and regulatory powers after months of horror stories from tenants.
“In the first 100 days I’d want to see the new PM freeze social housing rental prices for tenants. This may impact providers’ ability to provide service like repairs but, as we’ve seen, it’s never been a priority,” said Tweneboa.
“The government will need to provide funding to support providers and repair departments specifically to make sure the issue of tenant neglect and substandard housing doesn’t continue, especially if they’ve ‘learned lessons’ from Grenfell.”
Tweneboa told the Big Issue investing in social housing should be an immediate priority for the new leader, rather than continuing plans announced by Johnson to extend the Right to Buy scheme to housing association tenants and risking eroding stock even further.
“I expect the new prime minister to prioritise social housing and the need for a decent and safe home,” said Tweneboa. “Not the financially driven Right to Buy scheme which anyone with a basic level of housing knowledge would understand is a disastrous idea.
“I’d like to see the government announce major investment into building safe and affordable social housing specifically. The government needs to work both smarter and harder when it comes to social housing. Tenants will be demanding answers at the next election.”
Raise housing benefit to reflect rising rents
The housing crisis has already pushed finding an affordable place to live out of reach for many.
Alongside new promised cost of living crisis support, the new leader could help right away by raising housing benefit to reflect surging rents. Crisis has led calls for this after research with Zoopla found just 12 per cent of properties listed on the property site were affordable for people on low incomes.
Build more affordable homes
Longer term, Truss must improve the supply of affordable homes to take the pressure off the private rented sector.
The previous regime never got close to meeting the 300,000 homes a year target which the 2019 Conservative manifesto promised to hit by the mid-2020s. That target could become a thing of the past after Truss dismissed it as “Stalinist” on the campaign trail.
On housing delivery both candidates are taking different approaches. Truss has promised more powers for local councils to increase house-building and has targeted green belt land. Sunak, however, has said he will ban building on greenbelt land and target brownfield land – he previously announced a £1.8bn brownfield development fund as chancellor.
Tackling the issue of second homes and short-term lets could help make more homes available. The new PM could follow the Welsh government’s example of tweaking taxes and planning rules or could focus on the ongoing consultation into how to tackle the rise of Airbnb and its contemporaries.
Either way, she is walking into a housing market that Neal Hudson, a housing market analyst at Built Place, said this week “is getting scary”.
Record house price and rent rises have been the norm in the last year but rising interest rates and the cost of living crisis are about to bring a “crash” in prices, according to Hudson.
With prospective buyers struggling to borrow the funds to meet sellers’ price expectations, the market is facing stagnation and there are already signs of falling demand.
“For it to turn into a crash would require a large number of forced sellers. Unfortunately, the cost of living crisis increasingly looks like it may lead to that,” Hudson said.
During the pandemic, Sunak brought in a stamp duty holiday to trigger demand for homes but, with interest rates set to rise further, new support to help people on to the housing ladder could well be necessary.
Appoint a housing secretary who’ll deliver
Truss will also have to install a housing secretary with a proven track record of getting things done.
It’s rare that a departing cabinet minister is mourned by campaigners but that was the case when Michael Gove was sacked as Johnson’s premiership collapsed.
Gove had won the trust of leaseholders caught up in the building safety scandal by squeezing money out of developers to stop leaseholders facing sky-high bills while also convincing them to sign up to a binding Building Safety Pledge.
But the issue is far from resolved, according to Giles Grover from End Our Cladding Scandal.
“One of the first things the PM must tackle are the major developers, many of whom are apparently refusing to sign contracts to fix unsafe buildings in the hope that a new cabinet may be far more lenient towards them,” said Grover.
“The relentless financial exploitation of leaseholders must finally and for good be addressed – we’re talking huge insurance hikes, waking watch fees and service charge increases which have led to mental health problems and financial hardship across the board. Many of these issues have been bubbling under for years – it’s finally time to solve them and end this scandal for good.”
With no shortage of issues, the challenge of tackling the housing crisis is an unenviable one. But it’s a challenge Truss and her chosen housing secretary must not duck if they want to prevent a cost of living crisis from becoming a homelessness crisis.
Urgent action is needed to prevent even more people being pushed into homelessness. A secure home is the first step in addressing the cruel cycle of poverty to ensure people can fulfil their potential. Join us to keep people in their homes.