London boroughs are warning of housing pressures in the capital reaching “new extremes” as data shows a surge in the number of landlords withdrawing their properties from use as temporary accommodation for homeless households.

A London Councils survey reveals that between September 2022 and April 2023, 15 boroughs reported receiving a Notice to Quit (a legal notice requesting the return of a property) from landlords for 3,531 properties in use as temporary accommodation.

This represents a 120% increase on the 1,601 notices received over the same period in 2021-22 and is equivalent to a loss of 6% of London’s total temporary accommodation stock.

London Councils estimates that almost 170,000 Londoners are now homeless and in temporary accommodation. This equates to one in 50 Londoners overall and includes one in 23 children in the capital.

The number of households entitled to homelessness support from a London borough (i.e. owed a homelessness prevention or relief duty) increased 15.2% between April 2022 and April 2023.

There has also been a dramatic 781% increase in homeless families placed in bed and breakfast accommodation beyond the legal six-week limit. This equates to 1,287 London families stuck in unsuitable B&B accommodation in April 2023 compared to 146 the same month last year.

London Councils and partners commissioned research from Savills and the LSE warning that supply constraints in the private rental market are worsening the capital’s homelessness crisis.

Cllr Darren Rodwell, London Councils’ Executive Member for Regeneration, Housing & Planning, said:

“Turbulence in the private rented sector is a key factor behind the capital’s skyrocketing rates of homelessness. The combination of fast-rising private rents and a dramatic fall in the availability of rental properties is driving housing pressures in the capital to new extremes. Boroughs are seriously struggling to secure temporary accommodation for homeless families. Across London we see landlords withdrawing their properties from use as temporary accommodation, with the result that boroughs run out of alternatives and end up placing more and more families with children in unsuitable B&Bs. Nobody wants this happening, but boroughs face a complete lack of other options for keeping a roof over an increasing number of homeless families’ heads. The homelessness situation in London is becoming unmanageable. We need the government to treat this as the emergency it is and work with us in reversing the numbers relying on temporary accommodation.”

Rising homelessness numbers are putting immense strain on boroughs’ finances. London Councils estimates that boroughs collectively spend more than £60 million each month on temporary accommodation costs.

London Councils’ data also suggests boroughs’ monthly spending on temporary accommodation increased 16.3% from April 2022 to April 2023. In addition, it is estimated that the net deficit across London boroughs’ homelessness services is on course to reach £244m in 2023-24, an increase of 37% on the estimated deficit in 2022-23.

London Councils is urging the government to:

Raise Local Housing Allowance (LHA). LHA, which eligible households receive as part of their housing benefit or Universal Credit if they have a private landlord, has been frozen since 2020 despite private rents increasing since then. Boroughs believe LHA should be increased to cover at least 30% of local market rents – a policy the government adopted successfully at the height of the Covid-19 pandemic.

Support councils to buy accommodation sold by private landlords. 40% of all homes listed for sale in London in 2022 were previously let by a private landlord. The government should build on initiatives such as the Local Authority Housing Fund by providing increased capital investment for housing acquisitions, particularly to acquire homes being sold by private landlords as they exit the market.

Boost Homelessness Prevention Grant funding. Local authorities play a vital role in supporting struggling households to avoid homelessness. Councils require an immediate emergency funding increase to ensure local services have the resources needed in the face of rising levels of demand for support.

Increase Discretionary Housing Payments. These payments are used by councils to help residents in financial crisis meet their housing costs. They are an essential homelessness prevention tool, but government funding for Discretionary Housing Payments in 2023-24 has been frozen at 2022-23 levels, despite significantly increasing homelessness pressures.

Bring forward a cross-departmental strategy to reduce homelessness. Tackling homelessness must become a major priority at a national level with government departments working together – in addition to key partners such as local authorities – as effectively as possible.