Homelessness and the supply of affordable housing

Approximate read time: 30 minutes

On 5 December 2024, the House of Lords will debate the following motion tabled by Baroness Warwick of Undercliffe (Labour):

To move that this House takes note of the need to increase housing supply and tackle homelessness.

This briefing discusses the contention that there is an undersupply of housing, and in particular affordable housing, and that this is one of the drivers of homelessness. It considers the situation in England only.

1. Overview

The demand for new housing can be driven by a variety of factors, such as:

• population growth and increase in the number of new households
• a backlog of need among people living in unsuitable accommodation
• affordability pressures stopping people from accessing the housing that they need

The undersupply of housing, and in particular affordable housing, has been identified as a key factor that can cause or increase someone’s risk of experiencing homelessness. This link between housing supply and homelessness is discussed in section 4 of this briefing. Section 5 summarises government policy since 2019. Sections 2 and 3 provide recent statistics on homelessness and the supply of affordable housing respectively.

This briefing focuses on the supply of affordable housing. However, further information on trends in housing supply, demands and barriers to house building can be found in the House of Commons Library briefing, ‘Tackling the under-supply of housing in England’ (19 May 2023).

There are various other interrelated factors that have been identified as drivers of homelessness. For example, restrictions to benefit entitlement, rising living costs, mental health issues and relationship breakdown. The House of Commons Library briefing ‘Statutory homelessness (England): Causes and government policy’ (30 July 2024) discusses more broadly the causes of homelessness.

2. Homelessness

2.1 How is homelessness defined?

Section 175 of the Housing Act 1996 states that someone is homeless if they have no accommodation available to them, along with their household, which:

• they have a legal right to occupy, such as by ownership, tenancy agreement or other permission to reside there
• they can access
• would be reasonable for them to continue occupying, such as being affordable and being fit for human habitation

The statutory definition also includes where someone has a mobile home, houseboat or other moveable structure that is suitable for human habitation, but there is nowhere they can legally place it and reside in it.

The Housing Act 1996 also states that someone is threatened with homelessness if they are likely to become homeless within 56 days.

2.2 How many are homeless in England?

Government statistics

The Ministry of Housing, Communities and Local Government publishes quarterly statutory homelessness statistics for England.^[1] This data is taken from local authorities (LAs), who are required to provide information on those approaching LAs for help with homelessness in line with the Homelessness Reduction Act 2017 (HRA 2017). The data covers the different support (called duties) LAs provide to households in different circumstances. In brief, these duties are:^[2]

• Prevention duty: Activities aimed at preventing a household threatened with homelessness within 56 days from becoming homeless. This would involve activities to enable an applicant to remain in their current home or finding them alternative accommodation. The duty lasts for up to 56 days but may be extended if the LA is continuing with efforts to prevent homelessness.
• Relief duty: Owed to households that are already homeless on approaching a LA, or are homeless at the end of a prevention duty, and require help to secure settled accommodation.
• Main duty: Support given by the LA to an applicant who is unintentionally homeless, eligible for assistance and has priority need. Households are assessed to see if they are owed a main duty if they did not secure accommodation at the relief stage.
• Temporary accommodation: This is secured by a LA under their statutory homelessness functions. The majority of households in temporary accommodation have been placed under the main homelessness duty, but temporary accommodation is also provided during the relief stage. Households are assessed to see if they are owed a main duty if they did not secure accommodation at the relief stage.

The House of Commons Library briefing ‘Statutory homelessness in (England): The legal framework and performance’ (30 July 2024) provides further information on the duties of LAs to prevent and relieve homelessness under the HRA 2017, and presents further statistics on statutory homelessness.

Table 1 presents data from government figures on the number of initial assessments made for households in England; how many of those assessed were considered as being threatened with homelessness and therefore owed a prevention duty; and the number assessed as homeless and therefore owed a relief duty.

(Source: Ministry of Housing, Communities and Local Government, ‘Statutory homelessness live tables: Table A1’, accessed 21 November 2024.)

Notes:

1. The outcome of the assessment whether the applicant is homeless or threatened with homelessness and what, if any, duty is owed to them by the local authority. Only includes households assessed post the introduction of the HRA 2017. A small number of households may be double counted across quarters where an initial decision was subject to review or where a household has made a new application.
2. Only includes households assessed as homeless on initial assessment. This excludes the number of relief duties owed to households who were homeless at the end of a prevention.
3. Totals now include cases with an assessment of “withdrew application before assessment” and “not eligible / no longer eligible”. This might increase the total number of initial assessments for the reporting quarter.
4. Provisional data to be revised next quarter.

In 2023/24, 146,430 households were assessed as being threatened with homelessness and therefore owed a prevention duty.^[3] This is a 3.1% increase from 2022/23. There were 178,560 households assessed as homeless and therefore owed a relief duty in 2023/24. This is up 12.3% from 2022/23.

The number of households whose prevention duty ended in 2023/24 was 135,180, an increase of 2.6% compared to the previous year.^[4] Table 2 presents data on the number of households with prevention duties ending and the number who had secured accommodation for six months or more at the end of their prevention duty.

(Source: Ministry of Housing, Communities and Local Government, ‘Statutory homelessness live tables: Table P1’, accessed 21 November 2024.)

Note:

1. Prevention duties as defined by the HRA 2017.

The department’s analysis of these figures contends that while the number of households with prevention duties ending had risen, the number of households securing accommodation at this stage had remained stable, meaning there had been a reduction in the proportion of households securing accommodation at this stage.^[5]

Government figures also showed that in 2022/23, 49.6% of households with children, and 54.8% of households without children, secured accommodation for six months or more at the end of their prevention duty.^[6] In 2023/24 this was 48.3% for those with children, or 28,700 households, and for households without children this was 53.1%, or 40,230 households. This represents a drop of 1.3 and 1.7 percentage points in the proportion of successful outcomes at the end of prevention duties respectively.

The number of households whose relief duty ended in 2023/24 was 199,120, an increase of 12.5% compared to the previous year.^[7] Table 3 presents government figures on the number of households with relief duties ending and the number who had secured accommodation for six months or more at the end of their relief duty. There are a number of possible reasons for relief duty ending, including that accommodation has been found, the applicants have been assessed as being in priority need and are moved to the main homelessness duty, or if 56 days have passed and the LA has taken reasonable steps to find suitable accommodation (for example, the applicants may not have cooperated with the LA or may be considered intentionally homeless).^[8]

(Source: Ministry of Housing, Communities and Local Government, ‘Statutory homelessness live tables: Table R1’, accessed 21 November 2024.)

Notes:

1. Relief duties as defined by the HRA 2017.

Similarly to prevention duty figures, the government states that while the number of households with relief duties ending had risen, the number of households securing accommodation at this stage had remained stable; therefore the proportion of households securing accommodation at this stage had reduced.^[9] In 2022/23, 27.9% of households with children, and 39.6% of households without children, secured accommodation for six months or more at the end of their relief duty. In 2023/24 this was 25.2%, or 16,600 households with children, and for households without children this was 35.6%, or 47,410 households. The government notes that this represents a drop of 2.7 and 4.0 percentage points in the proportion of successful outcomes at the end of relief duties respectively.

Table 4 shows the accommodation secured for all households following prevention or relief duties owed in 2022/23, showing number of households and percentage of outcome secured by duty type.

(Source: Ministry of Housing, Communities and Local Government, ‘Statutory homelessness in England: Financial year 2023–24’, 30 October 2024.)

The government notes that the number of households reported in temporary accommodation has been increasing since 2021/22, reaching 117,450 on 31 March 2024. The government reports this figure is higher than at any other point since the data series began in 1998.^[10]

The House of Commons Library briefing on ‘Households in temporary accommodation (England)’ (30 January 2023) provides more detailed statistics on trends in temporary accommodation.

Homelessness charity sector figures

Homelessness charity sector organisations such as Shelter and Crisis have argued official statistics do not reflect the full extent of the number of people who are homeless.^[11] Both Shelter and Crisis highlight that official figures do not include people who are homeless but have not approached a LA for assistance.

The ‘Homelessness monitor: England 2023’ is a longitudinal study, commissioned by Crisis and funded by Crisis and the Joseph Rowntree Foundation.^[12] It defines and collects data on ‘core homelessness’, which includes people sleeping rough, living in homeless hostels, placed in ‘unsuitable’ temporary accommodation, sofa surfing, and living in other non-conventional accommodation (such as cars, tents, boats).^[13]

In its 2023 Homelessness monitor publication, Crisis estimated the number of people experiencing core homelessness increased from around 206,000 in 2012 to around 242,000 in 2022.^[14] It contended that “baseline forecasts show core homelessness rising significantly in the immediate future, with overall core homelessness in 2024 one fifth higher than 2020 levels”.^[15]

3. Housing supply: Affordable housing

This section provides an overview of how the term affordable housing has been defined and used. It also presents headline figures for the number of new affordable homes supplied in recent years. Detailed information on different forms of affordable housing; funding schemes and programmes for new affordable housing; possible barriers to building new affordable homes; and trends in the supply of new affordable housing and statistics can be found in:

• House of Lords Library, ‘Supply of affordable housing’, 11 April 2024
• House of Commons Library, ‘Affordable housing in England’, 16 July 2024
• House of Commons Library, ‘Social rented housing in England: Past trends and prospects’, 4 March 2024

3.1 What is affordable housing?

There is no statutory definition of affordable housing.^[16] However, the government’s ‘National planning policy framework’ defines it as housing for “sale or rent for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers)”.^[17] This includes housing for rent at:

• Affordable or intermediate rent: Homes let at least 20% below local market rents (affordable rental properties) or let at rates set between market rents and social rents (intermediate rental properties).
• Social rent: Set through the ‘National rent regime in England’ at around 50% of market rents. Social rent homes are for people on low incomes. The majority of affordable housing is owned and managed by registered providers (RPs) that receive funding from Homes England or the Greater London Authority. There are three main types of RPs: not-for-profit RPs (known as housing associations), for-profit RPs and LAs. The activities of RPs are overseen by the Regulator of Social Housing. Affordable housing may also be targeted to address a specific need, such as specialist housing for vulnerable, older or disabled people, known as “supported housing”.^[18]

It also includes low-cost home ownership, such as:^[19]

• Shared ownership: For example, where homes are sold at a discounted rate (at least 20% below market value) for a share of the ownership, with rent paid to a landlord for the share they retain. This is also sometimes partnered with ‘Rent to buy’ schemes.
• Homes committed by developers to be sold at a discount: Developers can commit to selling homes at least 20% below local market value.
• Discounted homes for first-time buyers: For example, the ‘First homes scheme’, in which homes are sold to people buying their first home for 30% to 50% below market value.

This definition of affordable housing has been challenged. For instance, the 2020 independent Affordable Housing Commission argued that many of these routes were “clearly unaffordable to those on mid to lower incomes”.^[20] The commission said it heard evidence that “the mish-mash of definitions had made it difficult for councils to attune affordability to local conditions”. It suggested the definition should be based on people’s incomes and personal circumstances rather than market prices. Some parliamentary committees have also set out their own definitions for the purposes of their inquiries. For example:

• In July 2020, in a report on building more social housing, the House of Commons Communities and Local Government Committee described affordable housing as “an all-encompassing term for ownership and rented properties below market value and market rent”.^[21]
• The House of Commons Levelling Up, Housing and Communities Committee report ‘The finances and sustainability of the social housing sector’ used the term “social housing” to cover all types of subsidised or affordable rented housing.^[22]

3.2 How much additional affordable housing is being supplied?

The Ministry of Housing, Communities and Local Government publishes statistics on affordable housing supply in England. The department reported that there were 62,289 affordable homes delivered (completions) in England in 2023/24, a decrease of 2% compared with the previous year.^[23] However, it stated that this figure was the second highest number of completions since 2014/15, which marked the end of the government’s 2011–15 ‘Affordable homes’ programme. The highest number of completions since 2014/15 was in 2022/23. The government noted that the “relatively high” level of completions in the last two years was likely due to the end of the 2016–23 ‘Affordable homes’ programme. These schemes provided government grant funding to housing providers in England to support the costs of delivering affordable homes. Further information on the government scheme can be found in section 5 of this briefing.

In terms of the delivery of new affordable housing by tenure, the government states that its figures show that up to 2011/12 social rent was the most common affordable housing tenure for new supply.^[24] However, affordable rent became the most common since its introduction in 2011/12. The government argues that this “change was driven in part by the 2011–15 ‘Affordable homes’ programme, as well as subsequent affordable homes programmes, which funded affordable rent as a tenure”. Figure 1 provides a breakdown of new affordable housing supply by type of scheme since 1991/92.

Notes:

‘Other rent’ schemes includes data on London affordable rent, affordable rent and intermediate rent, and ‘Affordable home ownership’ schemes includes data on shared ownership, affordable home ownership and first homes. Data on ‘unknown tenure’ has been excluded.

The government notes that there had been a small decrease in the number of affordable rent homes completed in 2022/23 and 2023/24 compared to 2021/22, while the number of social rent completions had increased by a similar amount in both years.^[25] It contends that decreases of around 2,000 in 2022/23 and 2,300 in 2023/24 in affordable rent completions, compared to 2021/22, were “almost matched” by increases of 1,800 and 2,200 in social rent completions in 2022/23 and 2023/24 compared to 2021/22.

4. Increasing the supply of affordable housing to tackle homelessness

4.1 How has the supply of affordable housing been linked to levels of homelessness?

Commentators, parliamentarians and homelessness charities have identified what they describe as the long-term undersupply of housing, and in particular that of affordable housing, as a key driver of homelessness. Factors such as the number of households in temporary accommodation and on LAs’ waiting lists are cited as evidence that there is a shortage of affordable housing.^[26] Section 5 of this briefing looks at statements and policies of recent governments on this issue.

Recent comments by parliamentary committee reports linking the shortage of affordable housing and homelessness include:

• The House of Lords Built Environment Committee’s 2022 report said there was a “serious shortage of social housing, which is reflected in long waiting lists for social homes and a large number of families housed in temporary accommodation”.^[27]
• The House of Commons Levelling Up, Housing and Communities Committee heard evidence that an increase in social housing would “significantly reduce the hundreds of thousands of people sleeping rough and suffering from homelessness in England, if new social rent properties are prioritised for these groups”.^[28] It concluded that a social housebuilding programme would “help to significantly reduce the number of people suffering from homelessness, reduce the number of families in overcrowded homes, help families reduce their housing costs, as well as reduce pressures elsewhere in the housing system”.^[29] This view was reiterated in its April 2024 report into the finances and sustainability of the social housing sector.^[30]

Crisis’s ‘Homelessness monitor: England 2023’ argued that the “growing demand for the diminishing annual flow of social lettings has made it progressively more difficult to secure a social tenancy”.^[31] It reported that almost three-quarters (74%) of local authority respondents to its survey reported that it had “become more difficult to secure social rented tenancies for homeless households and those at risk over the past year”. The monitor also suggested that sourcing private rented accommodation had become more challenging for authorities.^[32]. It stated that its research had found:

In the four years to 2021/22, LA lettings to households new to the social housing (ie excluding transfers) fell by almost 20% from 64,000 to 52,000, driven mainly by a lack of new homes to replace right to buy sales.^[33] Over the same period, the number of applicants on LA housing registers increased by over 7% to 1.2 million. Recent research also suggests that there are a further 500,000 households in England with unmet needs for which social housing is the only suitable option.^[34]

The Smith Institute’s Affordable Housing Commission 2020 report also found that the “proportion of social lettings to homeless people (notably single homeless) […] has declined and access to decent private rented properties has become more difficult”.^[35] It stated that “one of the most depressing consequences of unaffordable housing is homelessness”.^[36] It called for a “step change in affordable housing supply”.

Other issues with housing and their link with homelessness have also been identified. For example, factors such as the increase in the terminations of shorthold tenancies and changes to the help available with housing costs through the benefit system. Further information on these factors can be found in the House of Commons Library briefing, ‘Statutory homelessness (England): Causes and government policy’ (30 July 2024).

4.2 How much more affordable housing is being called for?

Research commissioned by Crisis and the National Housing Federation, published in 2018, identified the need for 340,000 new homes in England for the period 2021–31.^[37] It said 90,000 of them should be for social rent per year. Analysis carried out for the Chartered Institute of Housing’s ‘UK Housing Review 2024’ came to a similar conclusion. It said updated figures indicated a need for an additional 60 to 70,000 homes for social rent per year up to 2030, rising to 90,000 each year from 2030.^[38]

The House of Commons Levelling Up, Housing and Communities Committee advocated for the figure of 90,000 new social rent homes a year in its 2020 and 2024 reports.^[39] The call has also been endorsed by the Affordable Housing Commission.^[40]

5. Government policy on homelessness and the supply of affordable housing

5.1 Conservative government policy between 2019 and 2024

The Conservative government said in 2019 that tackling homelessness and rough sleeping was “firmly at the heart” of its agenda.^[41] In 2022, it published an updated rough sleeping strategy entitled ‘Ending rough sleeping for good’. The government committed to acting across four areas: prevention, intervention, recovery and a transparent joined-up approach. In the area of prevention, the strategy committed to increasing affordability and security of housing.^[42]The strategy also set out how the government planned to address unacceptable, poor quality supported housing and increasing supply. Further information on the Conservative government’s rough sleeping strategy can be found in the House of Commons Library briefing, ‘Rough sleeping (England)’ (28 March 2023).

Originally launched in 2010 under David Cameron’s Conservative government, the ‘Affordable homes’ programme 2011–15 provided grant funding to local authorities and housing associations to help support the capital costs of developing affordable housing for rent or sale. In March 2020, the then chancellor of the exchequer, Rishi Sunak, announced an extension of the scheme.^[43] The government announced in September 2020 that £11.5bn would be allocated to the ‘Affordable homes’ programme 2021–26 to provide up to 180,000 new homes across England “should economic conditions allow” by 2029.^[44] The government said the programme intended to deliver around 32,000 social rent homes.^[45]

Reports from the National Audit Office (NAO) and from the House of Commons Public Accounts Committee in 2022 noted that the government was forecast to miss its target of building these 180,000 new homes by 2029.^[46] In its response to the committee report, the government acknowledged that the programme would miss its initial target and agreed to share a revised plan with Parliament.^[47]

In July 2024, the Ministry of Housing, Communities and Local Government published updated targets for the programme.^[48] According to these figures, the 2021–26 ‘Affordable homes’ programme was expected to deliver between 110,000 and 130,000 affordable homes, with at least 40,000 social rent homes and between 44,000 56,000 affordable homes for ownership.

The Conservative government also launched the ‘Affordable homes guarantee’ scheme. In the spring statement of 2019, the then chancellor of the exchequer, Philip Hammond, announced the creation of a £3bn ‘Affordable homes guarantee’ scheme to “support the delivery of around 30,000 affordable homes”.^[49] The government stated its aim was to provide low-cost, flexible loans to registered providers. The government announced an expansion of this scheme in the 2023 autumn statement.^[50] This expansion included an additional £3bn to the loan fund, aiming to support the construction of 20,000 new affordable homes, whilst also “improving the quality and efficiency of thousands more”. The scheme’s expansion was implemented in February 2024.

Further information on Conservative government policy and schemes to increase the supply of affordable housing, including social rented housing and the ‘First homes scheme’, can be found in the following briefings:

• House of Lords Library, ‘Supply of affordable housing’, 11 April 2024
• House of Commons Library, ‘Affordable housing in England’, 16 July 2024
• House of Commons Library, ‘Social rented housing in England: Past trends and prospects’, 4 March 2024
• House of Commons Library, ‘Tackling the under-supply of housing in England’, 19 May 2023

The NAO’s July 2024 report ‘The effectiveness of government in tackling homelessness’ argued that “dealing with homelessness is creating unsustainable financial pressure for some local authorities”.^[51] It suggested that the government would not be able to demonstrate value for money until it addressed funding constraints on local authorities’ capacity to prevent homelessness and invest in good quality temporary accommodation or other forms of housing. It argued that funding had remained fragmented and generally short-term. The NAO suggested that there was no overarching government strategy or targets for reducing statutory homelessness and highlighted that the government was falling behind on key programmes to improve housing supply.

Ahead of the 2024 general election, head of policy and external affairs at the Chartered Institute for Housing, Rachael Williamson, said the next government should provide “a much-needed boost to affordable housing supply” and called for a rebalancing of the affordable homes programme by “allocating a more significant proportion of the programme to social rented homes”.^[52] Ms Williamson argued that “this would have little to no effect on overall government spend”.

In its ‘Homelessness monitor: England 2023’ Crisis argued that one of the most effective short-term policies for reducing ‘core homelessness’ would be the allocation of a significant proportion of social lettings to core homelessness households.^[53] In the long term, it argued policies should include:

[…] increasing housing supply, a higher proportion of social lettings allocated to core homeless households, and large-scale expansion of housing first accompanied by appropriate rehabilitation provision and a reduction of traditional hostel accommodation.^[54]

5.2 Labour government policy

In its 2024 general election manifesto, the Labour Party said that in government it would develop a cross-government homelessness strategy and made a commitment to deliver “the biggest increase in social and affordable housebuilding in a generation”.^[55]

Measures intended to increase the supply of social and affordable housing were included in the 2024 budget. They included:

• Contributing an extra £500mn to the ‘Affordable homes’ programme for 2025/26.^[56]
• Reducing discounts under the ‘Right to buy’ scheme and allowing councils to keep all receipts generated by sales.^[57] The government stated the measures aimed to “protect existing social housing stock to meet housing need, whilst ensuring long-term tenants can still benefit”.^[58]
• Consulting on a new five-year social housing rent settlement, which intends to increase social housing rent by consumer prices index + 1% for five years, to offer long-term certainty for social housing providers.^[59] The consultation would also seek views on other potential options for greater certainty, such as a 10-year settlement.^[60]

In a statement to the House of Commons, Deputy Prime Minister Angela Rayner explained that the additional £500mn for the existing ‘Affordable homes’ programme would “deliver up to 5,000 new social and affordable homes, bringing total investment in housing supply in 2025/2026 to over £5bn”.^[61] Ms Rayner then set out the government’s future plans for the programme:

This comes ahead of the multi-year spending review next spring, where the government will set out details of new investment to succeed the 2021–26 affordable homes programme. This new investment will deliver a mix of homes for sub-market rent and home-ownership, with a particular focus on delivering homes for social rent.^[62]

The budget also announced that an additional £233mn would go to “tackling all forms of homelessness, taking total spending on reducing homelessness to nearly £1bn in 2025-26”.^[63] The government said the money would:

[…] directly fund critical services to prevent homelessness and support people into secure, stable housing—helping those at risk of homelessness to pay deposits and negotiate with landlords, reducing the overall need for temporary accommodation.^[64]

On 6 November 2024, Angela Rayner chaired the first meeting of the government’s cross-government taskforce to tackle homelessness.^[65] Commenting on the work of the taskforce, Ms Rayner said:

Bringing together ministers across government is a crucial step to tackle this crisis at its root and ensure everyone has access to the basic right of safe and secure housing.^[66]

She said funding to tackle homelessness was “just one branch of the government’s wider drive to fix the housing crisis”.^[67]

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