I have been blogging about government policies and direct links to homelessness for a decade with the austerity policies of bedroom tax, overall benefit cap and Universal Credit and so forth; an esoteric subject that has overnight become mainstream since the Kwarteng budget and a tweet below seen today by tens of thousands sums it up nicely:
UK on Friday: I worry about heating my home this winter
UK on Wednesday: I worry about having a home this winter
Homelessness has always been ‘othered’ – something that only happens to others – yet today and in the foreseeable future it is something that will affect hundreds of thousands of households in the near future whether tenants or mortgage payers.
Did anyone else notice the tweet below which is a 44% increase in mortgage rates and also viewed and liked by thousands?
The same mortgage that was 3.93% on Tuesday is 5.64% today with HSBC! (5 year fee saver fix).
As the risk of being flippant the only thing the current government will be world beating at is increasing homelessness as the 44% mortgage increase together with 40% of mortgage products being withdrawn by the market sees the market preventing viable remortgage solutions.
Almost all who othered homelessness in the past are in for one hell of a shock when it happens to them, which it inevitably will.
The 34.9% who own their home outright in England are mostly inured to it unless their relationship breaks down which is the number one reason for homelessness presentations. The 29.9% paying a mortgage, the 18.5% who rent privately, the 10.1% who rent from a housing association and the 6.7% who rent from a council are hurtling headlong into the state of homelessness an directly caused by government incompetence.
The prolonged recession and high interest rates that the Bank of England first reported in its May MPC Report to last all of 2023 is now likely to last longer. Their next MPC report on 3rd November will be required reading for an update on that as will be the next Bank of England MPC report scheduled for Thursday 15th December 22 after the OBR publishes its scrutiny of the 23 November ‘explainer’ of last week’s mini-budget of Kwarteng is released.
By this time we should (ahem!) know how much benefit rates will increase in April 23 and by how much Registered Provider (council) rents and Private Registered Provider (HA) rent will rise by in April 23. We are already seeing – anecdotally – significant hikes in private renting levels yet due to the dispersed nature of the PRS with its millions of landlords all acting independently little can be inferred from them. We know, today, that the government has no plans to increase LHA in the private sector and the scant detail of the Kwarteng mini-budget confirms no energy or other cost of living ‘mitigations’ are forthcoming after March 23.
We have a perfect shitstorm of conditions for a massive spike in homeless household numbers and one which is structural unless radical changes such as the abandonment of the overall benefit cap policy and many other austerity policies occur. However, the reverse is likely as many expect that working-age benefits will not keep up with CPI inflation and like wages will be a real term cut which directly creates higher household expenditure costs from lower household benefit and/or wage incomes. Government has to balance the books it will say so reduced public spending is needed to offset the giveaway tax cuts so more austerity seems assured making homelessness hikes even more inevitable.
One issue never mentioned about the cut from 45p to 40p tax rate is how much this exposes the greater than 60% effective tax rate on low earners when the many millions on low pay who have to claim Universal Credit see each extra one pound earned a cut to Universal Credit of over 60%. How can any Government justify a tax rate 50% higher to those on minimum wage than paid by those on £155k or more? This is but one example of how the Kwarteng budget has lots of issues still to be raised that have yet to reach the mainstream. By the time the OBR has had the chance to scrutinise it we will also be seeing other inflations hit the mainstream media of how much water rates and council tax will increase by next April is merely another element of the perfect shitstorm for increasing homelessness.
Finally, I intended this post to use my 30 years of working in and advising on homelessness to say how bad it will be for all newly homeless households, yet the reality of what hundreds of thousands are going to see would sound so far-fetched that you wouldn’t believe it. Instead, I will leave this with prepare yourself for the worst you can imagine and you may be 10% prepared for the homeless reality you will find soon enough.