How do we fix the housing crisis? Welcome to The i Paper’s opinion series, in which our writers share their experiences of the UK’s dysfunctional housing system and examine how we can fix it.
The scandal of England’s one million empty homes
I’ve spent £147,000 on renting – at 56, I feel so insecure
How the van-life generation made homelessness into an aesthetic
The ‘spinster’ housing crisis can no longer be ignored
There are few statistics about the UK’s housing crisis more sobering than this: 104 children have died in temporary accommodation since 2019 – with the accommodation listed as a potentially relevant factor in their deaths.
Temporary housing comes in a variety of forms. For some, it is a simple room in a shared house. The luckiest – if we can use that word – have their own bathrooms, and access to a kitchen. For others it might be a hotel room or a hostel, with no cooking facilities whatsoever. Some people are placed in converted office buildings in run-down business parks. Some are even put in converted shipping containers, caravans and cabins.
While much has been written about the terrible quality of temporary accommodation in recent years, such as homes riddled with mould and damp, not enough has been said about who is profiting from it. Councils spend more than £2.8bn a year to provide this emergency housing for families who would otherwise be homeless. This makes it big business, and an industry has set up to profit from it.
When The i Paper and Inside Housing investigated who was getting the money from temporary housing last year, it wasn’t big hotel chains and bed and breakfasts that topped the list, but a series of estate agencies which sound no different from the ones you would see on your high street. But these businesses have found a new way of making money.
These agencies act as middle-men between private landlords and the councils in need of temporary housing. They are often local estate agency firms who have spotted a lucrative gap in the market: offer private landlords guaranteed rental payments and zero management responsibilities. They advertise to landlords locally, and landlords who want an easier life then evict any existing tenants, and lease the home to the agency instead.
The agency will then offer the property room-by-room to local authorities, who use the rooms to house families who have come to them in need of help. This model is known as rent-to-rent. An original landlord rents the home to a letting agent, who rents it again – this time to the homeless families who have approached the council. Profits can be higher than the regular market, with all the work and risk eliminated.
As demand for temporary housing has spiralled since Covid (a result of soaring rents, rising evictions, a growing population of renters and a reduction in available properties at the lowest end of the market), these “rent-to-rent” landlords have been able to bleed more money out of councils by only agreeing to let the properties on “nightly rates”. Some even demand cash incentives at the start to take tenants when councils are desperate. Prices vary, but in hotspots nightly rates can exceed £100 a night.
This profiteering is part of what is driving temporary accommodation costs so high: back in 2018, the total cost of temporary accommodation to councils was below £1bn. The number of households in temporary accommodation has risen 63 per cent since then, but the cost has risen 180 per cent.
It is a market where a limited supply of available rooms and relentlessly rising demand has allowed these landlords and their middle men to bleed councils dry.
Sometimes it is not estate agency firms, but budding wannabe entrepreneurs, who market themselves as property investors on TikTok. There is money to be made quickly from this kind of housing and very little regulation – you don’t need to own a home yourself or any qualifications, you just need enough charm to talk a private landlord into a lease and then the phone number of whoever books bed spaces at your local town hall.
The impact of this new market is starting to bleed through into more mainstream houses. Sources at London local authorities tell me they have seen a rush of evictions ahead of the new Renters Rights Act coming into force this week. Landlords are taking homes out of the regular private rented market, so that they can re-let them on a guaranteed rent deal to house homeless families. But the families they evict – ironically – may well end up as the homeless clients in need of temporary housing.
This injection of state money is also keeping prices high: we often talk about richer households moving into poor areas and triggering an increase in rents, but here the issue is working the other way round with the same effect. The Government is spending so much housing poorer families that people in the regular private rented market can no longer keep up.
Alternatives are available: long term we need to rebuild the country’s depleted supply of social housing, but more immediately, we need a benefit system that reflects the cost of paying the rent.
We should also be empowering councils to own their own temporary accommodation, and build units of decent, self-contained housing – which can be done relatively quickly. The company Portakabin, for example, has designs for safe, comfortable modular housing which councils could erect quite quickly. This sort of housing is not perfect, but it knocks spots off what is currently being offered. Instead, our reliance on private providers and our desperation mean there is next to no quality control.
Data on the quality of housing provided by these firms is not available, or routinely monitored. There are likely to be some rooms that are in an acceptable state – if small. Living in one of these properties is undoubtedly a better deal than living on the streets, and a place that has cooking facilities, food storage and some privacy is a much better deal for a mum than a hotel – especially since stays in “temporary” accommodation are often counted in years in London.
But the complex structure – a landlord, an estate agency and a council – mean it is often not clear who is responsible for repairs.
In my book, Homesick, I spoke to mums who had lived in accommodation like this with mould so severe it would grow in their child’s cot overnight. Another described a cockroach infestation in the oven so severe it looked like a single heaving mass of insect. There is also a lack of space: some mums have shared beds with their teenage children for years, while babies are missing development milestones and growing up with flattened heads from lying still in the same space for so long because they are unable to crawl around. These were mums in classic rent-to-rent housing.
Safeguarding is a major worry: temporary housing is often jumbled in with other kinds of emergency accommodation – care leavers, prison leavers and people discharged from mental health hospitals.
All of this and more is the reality of temporary accommodation these days, and in the worst instances it is costing children their lives. This should be a scandal that shames us all. Instead we have made it an ever growing cash machine for middle-men and landlords seeking an easy return.