Homeless impact report

A fundamental report by the Chartered institute of Housing in conjunction with the Centre Homelessness Impact has revealed the impact and real savings which could arise from building more social rented homes to benefits and temporary accommodation costs.

The partnership report reveals that building 10,000 homes a year in the social rented sector would cost central government around £40 million a year in loan charge on grants but could in turn save £44 million a year in housing subsidies if used on a 50-50 basis for tenants currently in private rented housing and families in temporary accommodation.

The cost to the Exchequer of building more social rented homes can be offset by the savings in benefit and temporary accommodation costs

• Building 10,000 new homes a year in the social rented sector would cost central government around £40 million a year in loan charges on grants (depending on interest rates) but could save £44 million a year in housing subsidies if used on a 50:50 bases for tenants currently in private rented housing and families in temporary accommodation
• If all recipients of HB or UC in the private sector could switch to social rented units, it would achieve considerable savings to the Exchequer, as well as making low-income households less vulnerable to homelessness….saving would be £1.9 billion a year
• Councils could save £572 million a year if they could use social rented housing for the 73,700 lettings they currently use in the private rented sector for households at risk of homelessness.
• Moving each benefit claimant out of a private letting and into a social rented unit saves about £1,100 per year in benefit payments.
• Moving each family in temporary accommodation out of an expensive private letting into social rented accommodation saves about £7,760 per year.
• The Department of Work and Pensions spends £30.6 billion a year on housing benefit and the housing element of Universal Credit (UC), around 15% of the benefits budget. This is forecast to increase to £31.3 billion by 2025-26 as more people switch to UC
• 1.7 million tenants in private rented accommodation, where rents are higher, receive housing subsidies through the benefits system - most of them are in work. This costs £7.9 billion a year
• Before the pandemic temporary accommodation for families experiencing homelessness was costing local authorities £1.2 billion a year; almost four fifths of such accommodation is met using private rented housing