Rent rises in Hackney causing homelessness to spiral, council warns

‘Councils on the brink’: Homelessness lead Cllr Sade Etti. Photograph: Hackney Council

A spike in homelessness in Hackney is down to rent rises outpacing the rest of London, the council has said – amid warnings that the whole city is facing an “emergency”.

New analysis from London Councils, a collective of the capital’s local authorities, revealed that boroughs had spent a total of £114m each month on temporary accommodation in financial year 2023/24.

This marks a dramatic 68 per cent increase from the previous year.

Cllr Sade Etti, Hackney’s cabinet member for homelessness prevention, rough sleeping and temporary accommodation, said the council would spend more than £28m sheltering unhoused residents by the end of the year—more than ten times the amount two years ago.

“Rents and house prices have risen faster in Hackney than in any other borough, which means the cost of housing and the growing number of families who come to us unable to find somewhere to live has expanded rapidly,” she said.

“On the frontline are more than 3,000 households—including nearly 4,000 children—who don’t have a permanent place to call home.

“The heartbreaking reality is that many of these will spend a decade or more in far from ideal temporary housing, or face leaving the borough to find a home they can afford.”

Last week, Hackney’s finance chief Cllr Robert Chapman said if homelessness continues to worsen, the Town Hall may need to apply for a government bailout – as 19 other councils did earlier this year.

This follows his forecasting a £36m overspend for the rest of the financial year.

Cllr Etti added that temporary accommodation had contributed to more than half of this shortfall, and was “one of the reasons we’re having to make extremely difficult decisions about where we need to reduce investment in order to protect vital frontline services”.

“With so many councils on the brink, it’s clear that we need national action to tackle the underlying cause of this crisis—starting with the major investment we need to deliver genuinely affordable housing at scale,” she added.

The Citizen understands that, right now, there are 3,917 children in temporary accommodation in Hackney.

A council spokesperson said it had been lobbying the government to uproot the causes of homelessness by increasing the benefit cap level or making temporary accommodation exempt from the overall welfare limit.

Another option floated to Downing Street by Hackney Council is to slow the rate costs are rising by ending the competition between central and local government for properties, and increasing the housing benefit rate for temporary accommodation.

This would better reflect the reality of the local market and enable the local authority to buy a wider range of housing to meet demand, the spokesperson said.

Last Thursday, Cllr Grace Williams, London Councils’ executive member for housing and regeneration, said the capital was at the “epicentre” of a national crisis.

“We are grappling with the most severe housing and homelessness pressures in the country.

“Homelessness is an injustice and has a devastating impact on individuals and families, undermining Londoners’ health, wellbeing, and opportunities.

“As these figures show, it also brings utterly unsustainable costs to councils. Without urgent action, homelessness pressures will break London boroughs’ budgets.

“We welcome the government’s commitment to tackling homelessness and to building the affordable housing our communities need. Boroughs are relying on the upcoming Budget to bring renewed support for local homelessness services and policies to reduce homelessness as quickly as possible.”