The cost of living crisis has truly sunk its teeth into Britain. Since late 2021, the price of almost everything has climbed and climbed. And there’s barely a sector of the economy it hasn’t touched. Whether it’s food shopping, utility bills, or travel, we’ve all seen our buying power dwindle over the last few years.
Last winter saw story after heartbreaking story about families faced with the grim choice between heating and eating, but the crisis could now be threatening the roof over their heads too.
Who Is at Risk?
New figures from the Ministry of Justice (MoJ) reveal that between April and June 2024, mortgage possession claims increased by 34%, compared to the same quarter last year. Meanwhile, Landlord possession claims increased by 9% and possession orders by 15%. To put a number on it, that’s some 29,000 eviction claims, leaving tens of thousands at risk of losing their homes.
This follows the news from April this year that homelessness across England jumped 16% in the last 3 months of 2023. Figures released by the government show nearly 45,000 households were assessed as homeless in the period from September to December – up from 39,000 across the same quarter in 2022.
As the Law Society has warned, we’re facing a situation where thousands of ordinary people across the country risk losing their homes. What’s more, a situation that is already at a crisis point is potentially about to spiral out of control.
Why Is This Happening?
Anyone who’s visited a UK city centre during the last few years can attest to the shocking numbers of homeless people on the streets. But what’s driving this and why the sudden uptick in already-high homelessness numbers?
At the macro level, the cost of living crisis has been driven by an unholy alliance of several factors. A global rise in inflation driven by the economic impact of the COVID-19 pandemic, Russia’s invasion of Ukraine, and Brexit, has led to a scenario where the price of goods has increased dramatically while real incomes have fallen.
This becomes a simple question of maths. Households’ outgoings have increased substantially, without a corresponding increase in real incomes to make up the shortfall. This leads to less money in people’s pockets and more pressure to make difficult choices to survive. Once you’ve cut back on luxuries and nice-to-haves do you prioritise heating, eating or housing costs?
However, things are a little more complicated when it comes to the housing market. Although everything we’ve mentioned so far contributes, there are several other factors in play.
First up, legal aid. As the cost of living crisis bites down harder many households are struggling to keep up with mortgage or rent payments. Once proceedings reach the eviction or repossession stage, many families’ only lifeline for challenging the decision is legal aid.
Unfortunately, this presents a big problem. Due to cuts during the last decade, legal aid has become incredibly difficult to come by. The Law Society has estimated that as many as 25.3 million people do not have a local legal aid provider for housing advice. Additionally, an increasing number of law firms can no longer afford to offer this service as legal aid rates have been slashed by almost 50% since 1996.
The outcome is all too predictable. A ‘legal aid desert’ stretching further and further across the country that all but locks out huge swathes of the population from legal advice.
Legal aid isn’t the only culprit, however. We can’t ignore successive governments’ decades of failure to build enough genuinely affordable homes and social housing. Nor can we ignore the failure to keep already existing homes at reasonable prices, whether for renters or buyers.
These policies have left households struggling to scrape together ever-increasing sums, merely to keep a roof over their heads. Those who fail are being cast into homelessness or temporary accommodation, with little access to legal recourse, because there’s nowhere else for them to go.
What Can We Do about It?
Although the situation looks bleak at present, and whatever course of action is taken won’t prove easy or a quick fix, that doesn’t mean it’s hopeless. There are a few things the new UK government could do to start reducing the risk of homelessness.
In the short term, legal aid needs to be reinstated to its rightful place as a cornerstone of our justice system. This will require an aggressive commitment to funding it, but the alternative is the present situation where millions of citizens are effectively subject to a geographic lottery. The Government also needs to assess what it can do to make existing housing more affordable. This could take many forms, from mortgage relief and subsidies for homeowners to rental controls for private renters. Whatever it chooses, it’s clear doing nothing isn’t an option.
In the longer term, we need more genuinely affordable homes. It really is that simple. The newly instated government has made an ambitious commitment to build 1.5 million new homes in the next five years. And, while this displays the kind of intent needed to tackle the problem, it must also come with commitments to build bona fide affordable housing, for everyone from housing association tenants to first-time buyers. Too often in the past bold headline pledges have led to anemic results with tiny proportions of new developments committed to affordable housing.
This time we must do better.
While it’s remarkable that a country with the sixth-largest GDP globally has found itself in a situation where tens of thousands risk homelessness, this is the situation we’re in. Digging our way out of it will require bold solutions, let’s hope the new government has them.
