Structural Causes of Homelessness (UK)

‘Homelessness in the UK has risen by 132 per cent since 2010’- Crisis, The Homeless Monitor 2017.

Introduction

It has been reported through the Global Homelessness Statistics that there are about 1.6 billion people worldwide living in ‘inadequate housing’ (Homeless World Cup, 2018). The BBC has gone on to announce that so far in 2018; there are a quarter of a million homeless people in the UK, alone (BBC News, 2018).

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Source: Rough Sleeping Statistics Autumn 2017, England (Revised)

 

The diagram above reveals an increase in the number of rough sleepers counted one night during the autumn season in London, the rest of England, and England between 2010 and 2017. The count for 2010 to 2014 shows a generally slow increase. However, from 2014 to 2017 the number of rough sleepers counted has almost doubled with a counting of about 2,800 to nearly 5000.

According to Crisis, on the Homelessness Monitor of 2017, homelessness has increased by 132% since 2010. This subject of homelessness is increasingly a problem with each year that passes. This essay aims to outline and understand structural causes that might have contributed to the recent increase in homelessness in the UK. Three of the main structural causes will be covered in detail as to cover every known structural cause of homelessness will rob this piece of the focus and detail required to understand the subject.

 

Types of Homelessness in the UK

In discussing the subject of homelessness, the general public envisions the term as people at night and sometimes during the day, asleep or begging for money in and around tube stations, alleys and on shop corners. This case is referred to as ‘rough sleeping’. This is the most visible and well known form of homelessness. However the description of homelessness ranges through many situations and understanding the different types of homelessness is principal to tackling the issue we face in the UK. Taken from the diagram above, 4,751 people were counted in the autumn of 2017. This is a 15% increase from the autumn of 2016 where 4,134 were counted.

‘Temporary Accommodation’ is a less visible form of homelessness. In this situation, a person or household has acquired or is provided temporary shelter. More than not, temporary accommodation is not available indefinitely and homeless households and individuals are asked to leave within a day or two. On the 31st December 2016, around 75,740 households were counted to be in temporary accommodation, with about 60,240 of them including dependent children and/a pregnant woman. This should result in around 118,960 children or expected children (Housing Statistical Release, 2017). These households with children or a pregnant woman are categorised as ‘priority need groups’ by the government.

 

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Source: Statutory Homelessness and Prevention and Relief, July to September (Q3) 2017 – England

 

The table above shows the numbers counted for households in temporary accommodation on the 30th September 2017 compared to the previous quarter and year in London, the rest of England and England as a whole. The table reflects a vast increase of 4,440 in the number of households in temporary accommodation within just a year.

The types of temporary accommodation available range from hostels to shelters to woman’s refuges and a lot of the time, the regulations in these forms of accommodation are not appropriate for the people who occupy them (Crisis, 2018).

Unfortunately, there are several people who become homeless and are not shown on the UK database for homeless people. They do not appear in the official figures for homelessness. This is a case of ‘hidden homelessness’.  This category applies to homeless people who sofa surf between friends and family, squatting, in police cells and settling in more insecure and inadequate forms of accommodation. There are several reasons this category of the homeless is referred to as ‘hidden’. Many of the individuals in this category are not entitled to accommodation according to what falls under the homeless legislation of the UK. The assistance available from local authorities is also extremely limited (Crisis, 2018).

Statutory duties have been placed on housing authorities in the UK through the Housing (Homeless Persons) Act 1977, Housing Act 1996 and the Homeless Act 2002. They are to ensure that the households that have claimed to be homeless are provided with advice and assistance, free of charge. However, the government is not obliged to provide a home for every single person that claims to be homeless (Gov.uk, 2018). There are households that prove to be ineligible for assistance. As mentioned above, ‘priority need groups’ include the households in which there are children and/or a pregnant woman. This is a bracket that also includes people that are deemed vulnerable due to physical disabilities or mental illness.

 

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Source: Statutory Homelessness and Prevention and Relief, July to September (Q3) 2017 – England

As much as 29,340 applications for housing assistance were made in the month of July leading to the month of September 2017. The table above shows the decisions made by the local authorities. A total of 15,290 were accepted and owed a main homelessness duty. That was only 52% of the amount of people that initially applied.

The information provided above is concrete evidence to show that in each category of homelessness in the UK, there has been a substantial rise in the past 7-8 years.

 

Structural Causes of Homelessness

Numerous factors, separately and interrelatedly contribute to the increased level of homelessness in the UK. The scopes of understanding the problem are split between the individual and structural causes. There is debate on which type of cause of homelessness is primary. The term ‘structure’, refers to the construction or a framework of elements/factors. They are the boundaries in which each element is functionally connected to other elements (Business Dictionary).  Structural causes tend to be more social and economic in nature and are usually beyond the control of the individuals involved. Such problems can only be rectified through an improvement of the UK economy to create more job opportunities for the public, the implementation of long-term policies such as the government subsidising the building of more affordable homes and shelters and making sure that housing benefits are available to a wider scope of the people who need it. These structural causes include: poverty and unemployment, the property/housing market and government policies (England.shelter.org.uk, 2018).  The economic stance of the UK is an important factor in outlining the structural causes of homelessness. This is because the stance of the economy affects every aspect of what goes on in the UK from unemployment and poverty to benefits and the market, to policy making which come together in reducing and eradicating homelessness completely.

 

Poverty, Unemployment and Homelessness

Poverty is a state of being extremely poor. As stated by The World Bank Organisation, “the most commonly used way to measure poverty is based on incomes. A person is considered poor if his or her income level falls below some minimum level necessary to meet basic needs. This minimum level is usually called the “poverty line”. What is necessary to satisfy basic needs varies across time and societies. Therefore, poverty lines vary in time and place, and each country uses lines which are appropriate to its level of development, societal norms and values.”  As stated on the UK Poverty reports of 2017, 14 million people in the UK live in poverty. This amounts for about one in five of the population. Broken down, this is eight million working-age adults, four million children and 1.9 million pensioners living in poverty in the UK (JRF, 2018). The factors that contribute to a rise in poverty are numerous, some of which include: the country’s economy, unemployment and lack of adequate psychiatric care. These different issues are interrelated as an improvement with one component will affect another component as they all come together to alter the level of homelessness. Lack of financial stability in general equates to more difficulty with housing.

Homelessness is an extremely heterogeneous subject with people becoming homeless for a multitude of reasons including unemployment, which is the leading factor of poverty. Unemployment and poverty go hand in hand. Unemployment from an economic standpoint refers to when a person who is capable and in search of employment is unable to secure work.  With employment, an individual sells his or her labour for an income. That individual or household’s income is their mode of consumption in the economy. Economic consumption comes in the form of goods and services and this includes housing.

Through this analysis, one can draw a connection between unemployment and homelessness. If an individual is unemployed, they do not earn an income which makes them unable to pay for adequate housing or housing at all and this is the case for many inhabitants of the UK. This makes unemployment one of the precipitating factors of homelessness. The high levels of unemployment and issues arising in the workforce have made it extremely difficult for individuals and households to meet their basic needs and this case is especially so for individuals and households that are not entitled to welfare benefits and assistance from the government.

Crane et al (2005) conducted interviews in selected countries, including the UK. A total of 122 older people and newly homeless were interviewed. During the interview, information was recorded on the problems that contributed to them becoming homeless and many spoke on mental health, their accommodation being sold and other factors. However, a significant number of individuals spoke on unemployment and how it affected their housing situation directly and indirectly. For example, a subject mentioned his case of the death of his partner, leading to depression and eventually, unemployment that resulted in homelessness.  This proves the plausibility of a link between unemployment and homelessness in 1999, of which Nunez and Fox mentioned in their study of Family Homelessness across America, that unemployment is a key driver of family homelessness. It was also brought to light that even with the availability of work; the fact that an applicant is homeless can come against them in obtaining that job. The link between unemployment and homelessness is a cycle. Unemployment can lead to homelessness and homelessness can further unemployment. The rise in unemployment in the UK has contributed to the recent rise in homelessness in the UK.

 

The Housing Market and Homelessness

The problems that arise in the housing market contribute to the increasing problem of homelessness in the UK. Understanding this is crucial because changes in property prices in the UK will affect the value of wealth of that household and being either positive or negative, a wealth effect would have been created. Consequently, the rest of the economy will be affected in different ways, including the level of homelessness.

According to the Office of National Statistics, the last household projections in 2014 have stated that the number of households in England will grow to an average of 227,000 per year by year 2024 through higher birth rates, higher inward migration and other influences (Crisis, 2018). The UK population will grow and to match this projected growth, property building will need to rise. This is a simple case of demand and supply economics. The National Audit Office (NAO) interviewed local authorities where it was revealed that there is difficulty in providing temporary accommodation to homeless households because of the lack of supply and rising demand (National Audit Office, 2017).

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The illustration above is a simple depiction of the demand and supply of properties in the UK. (Q1, P1) represents the market equilibrium of properties with P1 referring to the average market price and Q1 referring to the quantity.

According to the information provided above, the UK population is expected to increase and so will the number of households. Official figures have shown that the population of London could reach 9.8 million by 2025. With this, more properties than available will be demanded (Osborne, 2018).

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The illustration above shows the effect of an increase in population as is the case in the UK with most respect to London. A population increase will cause an outward shift of the demand curve, noted as curve ‘D2’. This simply means the aggregate level of demand for properties has increased. Nonetheless, but it has increased more than the amount that can be supplied. In order to accommodate this change, average market price must increase to reach the new market equilibrium as shown with (Q2, P2).

The problem is evident that with this increase in property prices, many households will not be financially capable and it is at this point at which homelessness becomes more apparent.

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Source: ONS – House Price Index, UK- Office for National Statistics

 

In the graph above, the increase in average UK house prices from January 2005 to December 2017 is revealed. From April 2009, there has been a sharp rise in UK house prices and this evidence, coupled with Crisis’ report of homelessness increasing by 132% since 2010 solidifies the conclusion that the property market and increase in house prices have been very influential in the recent increase in UK homelessness. The fact that the supply of social and affordable housing has dropped in 2011, with a further and faster drop in 2015 has worsened the problem (Crisis, 2018).

 

Government Policies

The Localism Act 2011 has been viewed by many as what has lessened the effectiveness of the principal aspects of the UK housing settlement that have historically helped to moderate the UK’s poverty levels, including the problem of homelessness (Crisis, 2018).  In relation to the social housing policy in the UK, many changes were made through the Localism Act 2011. For example, ‘Affordable Rent’ was made up to 80% of the market levels and a system was put in place where local authorities were more productive in performing homelessness duties. However, local authorities gained ability to restrict the eligibility of access to social housing through statutory homelessness criteria meaning that certain groups would not be eligible for social housing.  These new policies have been intensified through the recent Housing and Planning Act 2016. This has contributed to the recent level of homelessness that has been reported with government funding cuts meaning that housing will be even more limited in supply.

Information above refers to the rise in property prices in the UK. As these prices rise, more and more people will be unable to afford them and will then apply for more affordable housing. However, the Localism Act 2011 and Housing and Planning Act 2016 have increased restrictions on eligibility. Therefore, only certain people, labelled as ‘priority’, were accepted for the housing leaving the rest, labelled as ‘non priority’. This again, is where homelessness became a reality for these individuals/households and the official figures of homelessness rose. According to the National Audit Office (NAO), the UK government has not shown focus in the direction of tackling homelessness as the department with the responsibility for preventing homelessness has not yet produced a plan for preventing homelessness (The Guardian, 2018).

In 2013, Ex Chancellor of the Exchequer first announced that there would be a cap on housing benefits till the year 2020, in an attempt to reduce the benefits bill. With this, thousands of households are going to have to come up with a way to pay for their rent without government assistance.  Many have been evicted and this has also contributed to the increase in homelessness in the UK. The number of households that are now homeless as a result of eviction has increased by 12% in just the past year and homelessness by eviction has been deemed the most common cause of homelessness (The Guardian, 2018). These government policies have contributed to the increase in homelessness. More benefit cuts have been planned for the future and has been calculated that incomes will be reduced to about £25 billion a year by 2020/21 (Crisis, 2018). Homelessness is 100% more likely to rise beyond this point.

 

Conclusion

“Home is a notion that only nations of the homeless fully appreciate and only the uprooted comprehend.” – Wallace Stegner, Angle of Repose. This quotation is especially important as it expresses the sentiment that one does not know their fortune until they begin to lose their fortune. It is paramount that the issue of homelessness is fully studied and understood because through thorough understanding, the issue can then be eradicated. Crisis (2018) has given a life expectancy for female rough sleepers of 43 and for male rough sleepers of 47. If the government makes more funding cuts without compensation for the homeless, it is inevitable that the situation will only worsen.  As observed, the image given of current UK homelessness is not encouraging and only seems to intensify. With that being said, the structural causes of homelessness outlined, do not work in isolation but come together to worsen the situation of homelessness in the UK. For example, unemployment is on the rise and as people are unemployed and do not earn an income, they are not able to pay for adequate housing especially as property prices are also rising and with the government policies and capping of benefits drastically reducing the income of several households, homelessness increases. One limitation of this piece is the fact that only government policies in regards to income have been outlined; whereas many government policies, negligent to mental illness exist that contribute to the level of homelessness as mental health is a greatly overlooked issue in the UK. Three structural causes have been outlined in this piece through extensive research: the study of basic economic concepts and real-life observation of the homeless in cold weather conditions in the city centre of Norwich. What must be understood is that these three structural causes are interrelated and come together to affect the level of homelessness in the UK. They must be studied in order to create adequate prevention and relief through government fiscal policies that will change property market prices and equate them to the job opportunities that will be created. Only then, will the level of homelessness in the UK begin to fall.

 

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