Economic crisis may jeopardise plan to reduce homeslessness

The economic crisis is likely to jeopardise councils’ progress towards the government’s target of halving the number of people in temporary accommodation in England by 2010, experts have warned.

Homelessness has been decreasing since 2003. In June the number of people in temporary accommodation was 12% lower than 12 months earlier. But charities and housing bodies have reported a sharp increase in the number of calls from people fearing homelessness in the past three months.

Repossessions increase

Last week, Citizens Advice said its services had seen a 51% rise in concerns about mortgage repayments in July to September compared with the same period last year. The Council of Mortgage Lenders has estimated that 45,000 homes will be repossessed this year in the UK, up from 27,100 in 2007.

In 2004 the government set a target of halving the number of people in temporary accommodation by 2010. About one-third of councils have already met the 2004 target to halve numbers in temporary accommodation.

But Abigail Davies, head of policy at the Chartered Institute of Housing, warned: “If the economic climate gets much worse it probably will impact on meeting the target. Not everyone classed as priority homeless will go into temporary accommodation, but I do expect the numbers to go up.”

Challenge to meet target

Rebecca Pritchard, the National Housing Federation’s head of support and neighbourhoods, said: “It’s going to be increasingly challenging to meet the target with the credit crunch and growing repossessions.”

Shelter head of policy Mark Thomas said: “Shelter has experienced a sharp rise in the number of people coming to us for advice who are finding themselves in difficulty with mortgage repayments.”

However, he said the government’s rescue package announced last month, under which £200m will help 6,000 vulnerable homeowners sell their homes in full or part to a registered social landlord, “should go a long way to mitigating the situation”.

He said: “Homelessness probably won’t go up to the extent that might have been expected if the government hadn’t taken preventive steps.”

Thomas added that much depended on the government meeting its commitments to increase housing supply.

Mike McCall, operations director at homelessness charity St Mungo’s, warned that the downturn could be very serious for the organisation at a time of rising demand for services.