Why not build homes?

London councils are paying private landlords more than £14m a year in “incentives” simply to persuade them to house homeless people, the Guardian can reveal.

The sweetener payments of up to £8,300 each were made to landlords more than 5,700 times in 2018 to house people who were either homeless or considered at risk of homelessness. The payouts are made in addition to rent. The fall in social housebuilding and a widening gap between housing benefit and market rents appear to be fuelling the payments. 

Landlords said the payments compensated for accepting homeless tenants who were more likely to fall behind on their rent, especially if they received universal credit which makes payments at least a month in arrears. 

Councils claimed some landlords played different boroughs off against each other to increase payouts and that the system was vulnerable to abuse. It operates nationwide, but London accounts for almost 70% of the total number of homeless families in England

“It is ludicrous councils have to resort to handing out cash sweeteners to secure housing for desperate families, when there’s a much more sustainable solution: build social housing on an ambitious scale,” said Polly Neate, the chief executive of Shelter.

It could be “a waste of money”. 

David Smith, the policy director at the Residential Landlords Association, said: “Councils should be focusing more on supporting tenants [so they don’t become homeless]. Bribing people isn’t the answer. You end up with people taking tenants who don’t really want them and then evicting them later.” Smith said: “The government’s decimation of social housing stock, together with the punitive benefits freeze and its refusal to address the growing issue of evictions, has created an environment where some private landlords are using a council’s desperation to pocket huge cash incentives just to rent their property out.”

Cllr Darren Rodwell, the housing lead at London Councils, said the level of payments was “a symptom of London’s broken housing market...At a time when our funding from central government has been reduced by 63% since 2010, we would much rather be investing in frontline services,” he said.

A million new homes could be built on previously used land in England, with more than 2,600 new sites identified in the past year.

Additional brownfield sites with room for more than 18,000 new homes have been found in Barnet, north London, as well as sites with capacity for 19,000 homes in south Cambridgeshire, 3,000 in Sheffield and 4,600 in Bristol, according to research into public registers by the Campaign to Protect Rural England (CPRE)

“Building on brownfield presents a fantastic opportunity to simultaneously remove local eyesores and breathe new life into areas crying out for regeneration,” said Rebecca Pullinger, the CPRE’s planning campaigner.