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Boroughs call for landlord tax breaks to head off homelessness crisis

Released on 13 February 2013

London Councils’ Leaders’ Committee (Tuesday 12 February) renewed calls for the government to consider introducing tax relief for private landlords renting to people claiming benefits in order to encourage them back into the market and avert a homelessness crisis.

The supply of temporary accommodation in the private rented sector is dropping dramatically in London at the same time as demand is rising. In the last 18 months there has been an estimated reduction of 20 per cent in the number of homes London boroughs can access.

Welfare reforms mean that the portion of the private rented market available to local councils for housing families has fallen, with just the bottom 30 per cent of available privately-rented property now available, measured by the cost of rents.

This decline in supply is made worse by landlords choosing to withdraw from the temporary accommodation market due to local housing allowance rates being significantly lower than market rents for most of London.

London Councils’ Executive Member for Housing, Mayor Sir Steve Bullock, said:

“All boroughs are working hard to increase the supply of temporary accommodation but this is proving very difficult.  Boroughs are expecting a continuing reduction in supply of private rented homes and increased levels of homelessness. These two factors are driving an urgent need to find alternatives to the current model, such as considering tax relief for landlords renting in the social housing sector.

“London Councils estimates that the scale of London’s housing deficit by 2020 will be 221,700. This is an issue which will gather pace over the next year to eighteen months as the implications of welfare reform in London begin to become clearer but this combination of circumstances has already led to the current increased use of bed and breakfast.”



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