Institute for Community Research and Development
Housing Research Update: ‘Out of Area’ Housing
Dr Steve Iafrati
February 2020
Introduction Through carrying out research with vulnerable people living in houses in multiple occupation (HMOs) it became apparent that many of the tenants interviewed lived relatively transitory lifestyles and had moved between different local authority areas. This led to conversations with local authority housing managers in the Midlands about the challenges faced by the poorest and most vulnerable households. Specifically the research led to a focus on households where there was a duty to accommodate under the 1996 Housing Act, but whom local authorities struggled to accommodate in their own area. For many of these households, they were eventually housed ‘out of area’, which means that the duty to accommodate was discharged by the local authority securing private sector rented accommodation within another local authority area. This led to research whereby, initially, freedom of information (FoI) requests were sent to 315 English local authorities that had responsibility for housing allocation. Of these, 210 local authorities responded to the FoI requests, with annualised data covering the period 2014/15 to 2018/19. Whilst a full report will be produced later this year, it seemed appropriate to share some of the initial findings. The composition of the 210 local authorities replying included 19 out of 32 London local authorities and a representative mix of metropolitan, urban and rural local authorities across the country.
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Headline figures During the 2014/15 to 2018/19 period, from the 210 local authorities responding to the FoI request:
67,103 households were accommodated out of area There was a year on year increase in the annual figure This can be compared with 153,783 households to whom local authorities accepted a duty to accommodate – this equates to 44% of households where there is a duty to accommodate being housed out of area.
Table 1: Households accommodated out or area and households to whom local authorities accepted a duty to accommodate (2014/15-2018/19) from FoI responses 40000
37629 Households accommodated out of area
35000 30444 30000
31669
28132 25909
25000 20000 14810
15000 10969
12485
15637
13202
10000
Households to whom local authoities accepted a duty to accommodate
5000 0 2014/15
2015/16
2016/17
2017/18
2018/19
Of these households accommodated out of area, approximately one-half to twothirds were families with children, though the figure varies between different local authorities. Nearly two-thirds of total households accommodated out of area were done so by London local authorities. Those accommodated out of area by London local authorities were predominantly housed in other London areas, but a significant number were placed in the Midlands, Bristol, the south coast, Watford, Luton, Kent and Essex, as well as further afield.
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The vast majority of local authorities do not carry out any criminal checks before accommodating out of area. Approximately half of local authorities responding did not have a specific policy in place regarding out of area accommodation, though many of those without a policy stated that they were currently working on such a policy. The data includes both temporary and permanent discharge of duty. This is potentially problematic as it can mean including households placed in temporary accommodation for one week before being placed in permanent accommodation, and therefore risks ‘double counting’. o However, the inclusion of temporary placements is important because (i) temporary accommodation can frequently be lengthy, and (ii) the data shows the number of out of area moves that households experienced and, consequently, the number of times that they were disrupted. The data is therefore a measure of household disruption as much as how many households ultimately ended up being accommodated out of area. o One of the findings of this research is that the difference between temporary and permanent accommodation, for many local authorities is relatively arbitrary. Whilst such temporary placements may, in theory be brief, one local authority responding to the FoI request stated that on average a single person can expect to be in temporary accommodation for one year and families for three years. o All the data, whether temporary or permanent discharge of duty, involve households being placed in accommodation in other local authorities. o It is the case that where London local authorities place within London, households could be geographically close to where they applied for housing. However, responses show that where London local authorities placed within London, they did so across the whole of the city rather than just neighbouring local authorities. As such, mindful of the size of London and cost of transport, it is likely that disruption to most of these households is comparable to being moved to other parts of the country. The data shows an increasing involuntary internal migration of some of the poorest and most vulnerable households. There exists a merry-go-round of households being moved between local authority areas, with many local authorities both exporting and importing such households without fully recognising the net impact. Of the 67,103 households accommodated out of area during the five year period, 41,458 were made by the 19 London local authorities responding to the FoI requests Other local authorities responding to the FoI request with notable records of placing households out of area include: o Ashford – 745 o Birmingham – 2902 4
o Chelmsford – 1146 o Cheshire West and Chester – 928 o Dartford – 696 o Epsom and Ewell – 515 o Hertsmere – 459 o Knowsley – 401 o Maidstone – 388 o Mid-Sussex – 438 o Northampton – 510 o Oldham – 816 o Peterborough – 502 o Rochford – 685 o Rother – 1399 o Salford – 1743 o Sandwell – 865 o South Gloucestershire – 469 o Swale – 1420 o Wokingham – 467 o TOTAL of 20 LAs listed above = 17,494 This means that 85% of out of area placements are made by the above listed 39 local authorities (20 listed plus 19 London local authorities).
Local authorities not responding to FoI Of those local authorities not responding, some cited changes in IT systems that had resulted in the data being inaccessible or lost and some cited the cost of retrieving the data. However, the main reason for not replying was that most of the 105 stated that the data was available through government live tables on homelessness. Whilst this was true, there is, to date, no live table data for 2018/19 and the data is disjointed and dispersed. The FoI returned data recognises the disruption caused by both temporary and permanent placements. The inclusion of live table data for the non-responding 105 local authorities added to the existing data from the 210 responding local authorities shows a similar year on year increase across the 2014/15 to 2017/18 period. During this time, using FoI data plus live table data to fill gaps, 79,963 households were housed out of area from a total of 195,377 households to whom local authorities accepted a duty to accommodate. This represents a figure of 41% of households to whom there is a duty to accommodate being housed out of area.
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With the addition of live table data to the FoI data, the year on year increase from 2014/15 to 2017/8, as shown below. Table 2: Households accommodated out or area and households to whom local authorities accepted a duty to accommodate (2014/15-2017/18) from FoI responses plus government live table data 45000 40224
41459
40000
Households accommodated out of area
34516
35000 31230 30000 25000
19572
20000
21404
22782
16205
Households to whom local authoities accepted a duty to accommodate
15000 10000 5000 0 2014/15
2015/16
2016/17
2017/18
Brief summary of potential impacts of out of area accommodation For households:
Loss of family and friends, which may be essential for childcare and emotional support. Feelings of social isolation and loneliness due to loss of community networks. Disruption to established connections with service providers in areas such as, for example, education, social services and health. Disruption to children’s education due to moving schools and loss of friends. There are examples of households being moved without school places being secured. Being placed in accommodation that can be unsafe and/or unsuitable. Issues of community cohesion for households with no recourse to public funds.
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For receiving local authorities:
Local authorities are usually not informed of households being placed in their areas; this is part of a broader trend of reduced communication at an officer level across local authorities. The issue usually comes to light when there is need for crisis interventions in areas such as social services or education. Out of area placements can skew local housing markets. Local authorities from London can pay above market rent in areas such as the Midlands and still be paying considerably less than market rent in London. This means that private landlords in receiving areas can adjust rent accordingly and give preference to out of area households where there is more potential rental income. Properties are usually not inspected by the local authority placing a household out of area.
Breakdown of protocols:
Organisations such as the Local Government Association have sought to develop protocols and guidelines for local authorities discharging their statutory duties by housing OOA. The protocols include notifying host local authorities, maintaining contact with the households, equipping families with information on their new area, and checking suitability of school and nursery places in the new area. Evidence from the interviews with housing managers suggests that this is not happening. Such protocols appear beset with two problems: o Firstly, as protocols they represent best practice and from the interviews with housing managers within this research, there is at best a selective use of the protocols. o Secondly, the protocols aim to mitigate symptoms rather than the address causes. The reason for such high levels of out of area housing is because of there being crises within housing that are driving the year on year increases in out of area accommodation.
Out of area accommodation as an outcome of broader crises within housing The rise in out of area accommodation is a significant and growing concern that requires intervention and management. Ultimately however, out of area accommodation should be viewed as an immediate or crisis response to long-term structural problems within housing. The research recognises three main factors that are driving the increase in out of area placements – all of which need to be addressed if there is to be a decline. 7
Under-supply of housing
There are currently, and have been for many years, insufficient numbers of houses being completed in the UK to meet demand. This has the potential to increase house prices faster than wages. Because of the nature of private housing supply, increases in house prices will not result in proportionate increases in supply. In addition to declining numbers of council houses, there has been a decrease in completions of affordable rent and social housing properties during the last decade due to policy and intervention withdrawal by central government. This places a greater onus on the private sector to meet demand for housing. However, evidence of ‘market failure’ suggests that the private sector will only meet the market optimum level of housing, rather than the social optimum. The difference between the market optimum level and the social optimum level is the area currently filled by rising homelessness and out of area accommodations.
Housing unaffordability
House prices have grown faster than average wages, making purchasing a house increasingly difficult for large parts of the population. Increasing numbers of under-45s are now renting rather than buying and there is a growing generational disparity in terms of housing tenure. This has created economic opportunities in the private rented sector, which has grown from 10.1% of English housing stock in 2002 to 19.9% in 2018 – 2.1m to 4.8m properties. These trends are compounded by growth in zero hours contracts, gig economy work, underemployment, insecure/precarious employment and economic uncertainty – whilst unemployment levels are currently at a 45 year low, poverty and child poverty are continuing to grow.
Welfare reforms
Despite government rhetoric regarding ‘workers and shirkers’, most social security goes to households where at least one person works. Social security as an element of broader welfare provision is essential in areas such as meeting the cost of rent through Local Housing Allowance (LHA). LHA rates have been frozen since 2016 whilst rents have increased by roughly 3.5% per year; this is part of a broader pattern of welfare reforms and retrenchment. This means that in real terms, the freeze in benefits equates to a reduction in income for those reliant on social security. LHA rates are capped at what the government perceive to be fair level. However, in 148 of 152 LHA areas, the cap is insufficient to cover the rent of, for example, a two bedroom house at the 30th percentile rent. This means that at least 70% of rented properties are unaffordable to families accessing LHA in almost the entire country. 8
In Birmingham and the Black Country, for a two bedroom hose, the household would need to pay £30-£50 towards the rent from their own money. In London, there are almost no properties that fall within the LHA cap and a two bedroom house at the 30th percentile rent would require households to make a contribution of £100-£700 per month depending on locality.
Conclusions A perfect storm of under-supply of housing, unaffordability and welfare reforms have created a situation where increasing numbers of people, typically the poorest and most vulnerable, are finding housing increasingly problematic. In the wake of austerity and cuts to local authority budgets, a growing demand placed on local authorities has led to increasing numbers of households being housed out of area as a form of crisis response to the difficulties of housing provision. At the same time, government loss of faith in social housing coupled with a confidence in the private sector to meet housing demand appears increasingly misplaced. With little, or at least very limited, change on the horizon, it is difficult to see the situation improving in the near future. The only solution to meeting the needs of the poorest and most vulnerable in the housing market is for government to lead on developing an effective and evidence-based national housing strategy. Specifically, such a strategy should recognise the diversity of demand and need within housing and support a mixed economy of housing suppliers that is capable of meeting such demand. On an immediate level, a recommendation of this research is that local authorities might want to lead on developing vulnerable tenant or private sector housing forums comprising a range of interested agencies. Such forums could develop action plans and responses to manage early interventions and information sharing to reduce the extent of crisis management.
For more information, contact Dr Steve Iafrati at s.iafrati@wlv.ac.uk or visit the Institute for Community Research and Development (ICRD) at https://www.wlv.ac.uk/research/institutes-and-centres/icrd/ or follow on twitter @ICRDwlv
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