Council spending £500k per month on hotel rooms for homeless families

Shocking new report reveals ten-fold rise on spending as 200 Enfield families now stuck in hotels, reports Simon Allin, Local Democracy Reporter

Enfield Travelodge
Enfield Travelodge is frequently used to house homeless families amid a chronic housing shortage

Enfield Council is now spending £500,000 per month on hotel rooms for homeless families as the borough faces a growing shortage of private rental housing.

Spending on hotels has rocketed as rising interest rates, tax changes and tighter regulation of the sector drive landlords to exit the market, cutting the supply of accommodation available in the borough.

Historically, Enfield has had a high number of poorer households living in the private rented sector compared to other London boroughs. With these households vulnerable to changes in the market, the borough saw a 246% increase in the rate of homelessness between 2010 and 2017.

A chronic shortage of affordable housing led the council to turn to the private rented sector to reduce the number of households in temporary accommodation, which came alongside an early intervention approach aimed at preventing people from becoming homeless.

But this strategy has recently suffered a setback amid a wave of landlords selling up. The supply of affordable rented properties in the borough has shrunk by 90% over the past two years.

It means the council has increasingly come to rely on hotels and shared accommodation – which are “not suitable for residents, particularly those with children, for any length of time” according to a new civic centre report.

The council currently houses around 200 families in hotels with a nightly cost per room of approximately £100. Monthly spending on hotels reached £500,000 in February after soaring ten-fold in under a year.

Efforts to tackle the problems include creating a “rapid resettlement hub” and a pilot scheme allowing families to move out of London voluntarily.

The findings are set out in the council report that was presented to a meeting of the finance and performance scrutiny panel on Wednesday (29th). Richard Sorensen, head of the council’s housing advisory service, told the meeting that the authority’s focus on preventing homelessness had led to a drop in the proportion of households being placed into temporary accommodation.

But he said landlords were now exiting the market following tax changes, promises of increased regulation – including new decent home standards and energy efficiency standards – and the rise in interest rates, which have pushed up the cost of mortgages.

The borough is now seeing an increase in evictions coupled with a shortage of supply, he explained, with rents rising more than 10% in Enfield during the past twelve months.

Director of corporate finance James Newman told councillors that Enfield faced competition from around 20 other local authorities looking for accommodation in the borough, as well as the Home Office. Council bosses believe there are around 6,000 properties in Enfield being used by other London boroughs.

James said the combined pressures had led to a £6million overspend on the council’s temporary accommodation budget in 2022/23.

Under questioning from Labour panel chair Nawshad Ali, Richard revealed the homes being sold off by landlords were being bought by first-time buyers.

Officers admitted the council was not delivering enough social housing to solve the homelessness problem. Richard explained that if every council development planned for the next 15 to 20 years were delivered tomorrow, it would “just about address the current need”.

Pointing out that there are “lots of nice places to live outside of London”, Conservative panel member Paul Pratt asked about the plans to resettle families. But Richard explained that inner London boroughs had already spent years targeting areas outside the capital for housing, reducing the number of homes available for Enfield.

Under questioning from Tory leader Alessandro Georgiou, officers insisted the administration’s policy was to only move people to temporary accommodation outside the borough on a voluntary basis.

The head of the housing advisory service rejected suggestions from Cllr Georgiou that the council’s landlord licensing scheme – designed to boost the quality of private rented sector accommodation – had helped to drive landlords out of the market. He said the scheme cost landlords “around £100 per year” and denied the extra cost was having an impact.

Cllr Georgiou criticised what he called a “decade of failure” on delivering social housing and, alluding to recent problems on the Shires Estate in Edmonton, asked if it was fair that people did not want to move out of temporary accommodation into “the appalling [housing] stock that we do have”.

Director of housing and regeneration Joanne Drew admitted some homes were not fit for purpose and said the council was kicking off a £60m investment programme to bring it up to standard.

Cabinet member for social housing George Savva suggested Cllr Georgiou research how many social homes were built under the last Conservative civic centre administration and how many were sold off because of Margaret Thatcher’s right-to-buy policy. He added: “That’s why we’re here discussing temporary accommodation – because of the past sins of your government.”

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