4. factors influencing homelessness...homeless review 2018 4. factors influencing homelessness 4.1....
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Homeless review 2018
4. Factors influencing homelessness
4.1. The homelessness review should look at a range of factors that could affect homelessness in
their district such as population increase, the economy and housing market. This section of
the review looks at demographic factors likely to affect future housing need in Croydon and
wider economic factors including economic growth, employment and household incomes. It
goes on to look at how the housing market has developed in recent years and how this has
affected access to market housing, affordability and the supply of new housing. The review
then goes on to analyse trends in homeless prevention, rough sleeping and statutory
homelessness, and forecast future levels of homelessness.
Demographic change 4.2. Population and the household growth are key drivers of housing demand, they determine
the number of new homes required to keep up with population change. Housing need,
however, is driven by the proportion of different household types, the age structure of the
population and ethnic diversity which determines the type of housing required, the size of
new homes and the need for affordable housing. Levels of homelessness are affected by
overall provision of housing as well as access to market housing and the stock of affordable
housing for those unable to meet their needs in the housing market.
Population and households
4.3. The population of the UK has increased by 5 million since 2001 and by 10 million since 1964.
Natural change (the number of births over deaths) contributes slightly more to population
increase than inward migration. Croydon's population increased faster than projected
between the 2001 census and 2011 census.
4.4. The UK population is projected to increase by 3.6 million (5.5%) over the next 10 years, from
an estimated 65.6 million in mid-2016 to 69.2 million in mid-2026. The UK population is
projected to pass 70 million by mid-2029 and be 72.9 million in mid-2041. Croydon’s
population is growing, and is expected to reach 477,000 by 2041. This growth is driven by
population growth rather than migration.
Section 4 Table 1: Projected growth in Number of Households (Croydon)
2018 160,287
2028 182,709
2038 203,577 Source: GLA households central trend 2016
4.5. The number of households in England is expected to grow to 28,003,598 by 2039 – an
increase of 4,306,768 (an average of 205,084 per year). The current rate of housebuilding
Homeless review 2018
will need to double to keep pace with this increase. The number of households in Croydon is
expected to increase by 48,000 to 212,000 between 2019 and 2039.
4.6. In 2011, there were 145,010 households living in Croydon, of which 30% were one-person
households, and 34% were households with dependent children. There were 16,742 lone
parents with dependent children in Croydon in 2011, of which nearly half were not in
employment. Average household size in Croydon was 2.51 persons - slightly smaller than
London as a whole (2.58) but larger than the England at 2.4. One in five lone parent
households were living in overcrowded accommodation in 2011, double the rate of all
households.
4.7. Croydon has a higher proportion of concealed households than England. Concealed
households are potential homeless households. Future potential homelessness is therefore
likely to be higher than records of statutory homelessness suggest. The census 2011 found
there were 289,000 concealed families in England and Wales - 1.8% of all families in
households, an increase from 1.2% in 2001.The increase in concealed families was ten times
the rate of increase in unconcealed families between 2001 and 2011 (70% increase in
concealed families compared with a 6.6% in unconcealed families). There were 2,746
concealed households in Croydon in 2011 - 2.7% of all family households. Of which, 1,052 of
Croydon's concealed households were lone parent households - 1.1% of all family
households. We expect the number of concealed households to continue to increase faster
than the increase in unconcealed households, given difficulties accessing market housing in
terms of affordability and the limited availability of affordable housing.
4.8. Croydon has a younger population than London; however, it also has an ageing population.
An ageing population will affect the type of housing required in future, as well as the
requirement for support services to help people stay independent. Croydon has the largest
population of young people in London as well as a large population of younger children and
working age adults in Croydon. The proportion of older adults, aged 65 and over, in Croydon
is much lower than the national average.
Homeless review 2018
Section 4 Figure 1: Croydon’s population Age breakdown
4.9. The 2011-based interim sub-national population projections show how the age structure of
Croydon's population is expected to change between 2011 and 2021. In 2011, 12% of the
population of Croydon was aged 65 and over, and in 2021 it is expected that the proportion
of people aged 65 and over will increase by more than 10,000 to 14% of the population. The
number of people aged 80 and over is also expected to increase by 3,600 during the ten
years to 2021.
Section 4 Figure 2: Borough’s white population (2011 and projected to 2028 and 2038)
Source 2: GLA 2016-based housing-led ethnic group projections (50MB file)
43.09% 40.62%
2028 2038
Homeless review 2018
Ethnicity
4.10. Croydon has an ethnically diverse population – similar to inner London boroughs. BME
households are overrepresented among homeless households, and as tenants in social
housing. The 2011 census found that that only 14.6% of the population of England was from
Black or Minority Ethnic (BME) groups. BME groups in London represent a far larger
proportion of the population at 40.2%. Croydon had the 12th largest proportion of BME
residents in London at that time. The diversity of Croydon's population is similar to inner
London boroughs such as Hackney and Lambeth.
4.11. There are significant differences between different ethnic groups in terms of housing and
housing need. Bangladeshi and black African householders are more likely to live in social
rented housing than Indian or Chinese households are. Significantly, for housing need, large
and single parent households are more common among some BME groups than the white
British population and are more likely to be in poverty and be unable to satisfy their housing
Homeless review 2018
needs in the housing market. The demographic and socio-economic factors that affect BME
households’ housing needs are interconnected:
“…education, immigration patterns and employment rates influence income, while
demographic patterns determine the dependency ratio within a household.
Poverty is a main factor pushing people to social sector housing. Large families are
harder to support on the basis of income alone, and families with only one earner
tend to have below average incomes.”1
4.12. Around 20,000 people move into the borough each year from the rest of the UK. A similar
number move from Croydon to other areas of the UK. As a result, this has little impact on
the net increase in population. Figures for 2016 show that nearly 20,700 people moved into
Croydon from the UK and nearly 23,500 people moved out of the borough to other parts of
the UK. Therefore, there is a net loss of internal migrants into Croydon, but this is offset by
international inflows to the borough which continue to exceed the international outflows.
Migration patterns from 2011 Census data show a modest level of in-migration into the
borough. The highest migration rates into the borough are from Lambeth (3,882 per year),
Bromley (2,563 per year) and Sutton (2,190 per year).
Review question 4 - demographic change
Have we captured all the relevant demographic drivers of homelessness?
Deprivation and poverty
Index of Multiple Deprivation (IMD)
4.13. The Index of Multiple Deprivation (IMD) provides a relative ranking of areas across England
according to their level of deprivation. It ranks 32,482 Lower Super Output Areas (LSOAs) in
England against 38 different indicators covering specific aspects of deprivation including:
4.14. Croydon has 41 out of 220 LSOAs in the 20% most deprived areas in England according to
IMD 2015, an increase of 8 LSOAs since 2007 (5 since 2010). These are concentrated in
Croydon’s major housing estates and in the north and west of the borough, such as Waddon
and New Addington. There have been a number of changes in the most deprived LSOAs in
Croydon between IMD 2010 and 2015; however, broadly speaking the situation is very
1 Understanding demographic, spatial and economic impacts on future affordable housing demand, Cambridge Centre for
Housing and Planning Research, University of Cambridge (December 2007)
Income Employment Health and disability Education
Skills and training Barriers to housing and services Living environment Crime
Homeless review 2018
similar with significant deprivation concentrated in the north and south-east of the borough.
Figure 20 below compares the IMD rankings for 2010 and 2015.
4.15. Three LSOAs in Croydon fall within the 5% most deprived areas in England (three in 2015).
However, seven areas fall within the 6-10% bracket (four in 2007), and a further forty-one
fall within the 11-20% bracket (twenty-seven in 2010). Twenty-one LSOAs in Croydon fall
into the 20% least deprived (most wealthy) areas in England (twenty in 2010). This suggests a
slight worsening of deprivation levels. The pie chart below shows the proportion of LSOAs
within Croydon that lie within each decile.
4.16. Figure 3 below shows a comparison for all London boroughs based on their average score of
IMD. The higher the score, the more deprived the area. The average score summary
measure is calculated by averaging the LSOA scores in each larger area after they have been
population weighted.
Homeless review 2018
Section 4 Figure 3: Indices of Multiple Deprivation 2015 – London Boroughs
(Source: English Indices of Deprivation, 2015)
4.17. Figure 4 below shows a comparison for selected local authorities in England, including
Croydon, based on their average score of IMD. The higher the score, the more deprived the
area. Croydon ranks 232 out of 327 local authorities in England with, rank 1 being the least
deprived.
Section 4 Figure 4: Indices of Multiple Deprivation 2015 – selected authorities
(Source: English Indices of Deprivation, 2015)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
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4.18. There are many factors which contribute to inequality in the UK. This ranges from political
systems and institutions, technology, globalisation, childhood and family2. New research by
the London School of Economics and Political Science found recently there is an increasing
gap between the richest and poorest in the UK is directly linked to higher rates of poverty.
Both inequality and poverty are increasing and predicted to increase further in the next 5 to
15 years. The report, Double Trouble 3commissioned by Oxfam, showed that a positive
correlation between income inequality and income poverty in the UK can be clearly
established.
Destitution 4.19. The Joseph Rowntree Foundation (JRF) in their 2018 report Destitution4 in the UK estimates
that over 1.5 million people, including 365,000 children, were destitute in the UK at some
point during 2017. They could not afford to buy the bare essentials that we all need to eat,
stay warm and dry, and keep clean. People experiencing long-term poverty were typically
tipped into destitution by harsh debt recovery practices (mainly by public authorities and
utilities companies); benefit delays, gaps and sanctions; financial and other pressures
associated with poor health and disability; high costs of housing, fuel and other essentials;
and, for some migrants, extremely low levels of benefits or no eligibility for benefits at all.
4.20. The routes into destitution set out in the report include:
For the ‘UK-other’ (not migrant and without complex needs) destitute group, who are
68% of the total, the crushing effect of multiple debts, and harsh recovery practices on
the part of public authorities, is particularly strong. Benefit gaps, delays and freezes, as
well as sanctions, are key triggers to destitution.
Disability and ill-health are common complicating factors. Housing Benefit restrictions
mean that people have to 'top up' rental payments from their (already inadequate)
subsistence benefits, intended to cover other necessities, such as food and fuel.
For a minority of the UK-other group, low-paid, insecure employment and erratic pay
interact with gaps in benefits to leave them destitute. For a small subset, relationship
breakdown, usually combined with debt and housing difficulties, played a role.
For the complex needs group (15% of the total destitute population, one-third of whom
are migrants), debt, benefit and health issues were equally if not more present in their
routes into destitution. But their problems were compounded by high levels of
relationship breakdown (including domestic violence), experience of drug or alcohol
problems, being in trouble with the police, and, in some cases, eviction and housing
problems.
2 Equality Trust 3 ‘Double Trouble: A review of the relationship between UK poverty and economic inequality’ – Oxfam (2017)
https://policy-practice.oxfam.org.uk/publications/double-trouble-a-review-of-the-relationship-between-uk-
poverty-and-economic-ine-620373 4 ‘Destitution in the UK 2018’ – Joseph Rowntree Foundation - https://www.jrf.org.uk/report/destitution-uk-
2018
Homeless review 2018
Routes into destitution for many migrants without complex needs (16% of the destitute
population) shared some similarities with those of UK-born service users. However, they
often faced distinctive difficulties, including lack of access to the UK labour market,
benefit eligibility restrictions, or extremely low levels of benefits. This position has
deteriorated for both vulnerable EEA migrants and asylum seekers since 2015.
Relative and absolute poverty 4.21. Absolute poverty is a measure used by a number of international organisations (such as the
UN and the World Bank) to assess whether a household can afford the basic needs of life—
food, clothing, shelter and so on. Poverty is considered absolute in the sense that it is
measured relative to a fixed standard of living, rather than the rest of the population.
4.22. Relative poverty looks at whether a person can afford an "ordinary living pattern", and
whether they are excluded from the activities and opportunities that the average person
enjoys. A household is considered to be in relative poverty (also called relative low income) if
their household income is below 60% of the median household income. The calculation uses
incomes after taxes and benefits in order to spending power, rather than earning power, and
“equivalises” income to take into account household size. The ONS uses the "60% of the
median" benchmark to indicate whether someone is 'at risk of poverty'.
4.23. The Department for Work and Pensions produces figures for poverty using income before
and after housing costs, like rent or mortgage interest5. The charts below show the figures
for absolute and relative poverty in Great Britain/UK from 1994 to 2016/17. Absolute
poverty has decreased over this period from 40% of households to just less than 20%.
However, relative poverty has remained consistently over 20% (including housing costs) over
the same period. The percentage of working-age adults in relative low income in 2016/17
was 21% (one in five) after housing costs are taken into account. Unfortunately, the figures
are not available at local authority district level.
4.24. We can also look at other measures and indictors of poverty such as use of food banks, the
number of households entitled to free school meals, and the use of soup runs and drop-in
services for rough sleepers and people in need.
Free school meals
4.25. There are 151 schools in Croydon, 117 of which are state funded nursery, primary or
secondary schools. In January 2017 Croydon’s schools had 65,230 pupils including 56,980 in
state funded nursery, primary or secondary schools. 18.8% of pupils in state funded nursery
and primary schools in Croydon were known to be eligible for and claiming free school meals
in January 2017 – the highest of all London’s outer London boroughs. 16.6% of pupils in
state funded secondary schools were known to be eligible for and claiming free school meals
in January 2017 – the third highest in outer London.
5https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691917/households-below-
average-income-1994-1995-2016-2017.pdf#page=14
Homeless review 2018
Use of food banks
4.26. The Trussell Trust reports that 1,332,952 three-day emergency food supplies were given to
people in crisis by Trussell Trust foodbanks in the financial year 2017-2018. The top four
reasons for referral to a foodbank in The Trussell Trust network in 2017-18 were: ‘low
income – benefits, not earning’; ‘benefit delay’; ‘benefit change’; and, ‘debt’.
4.27. Universal Credit (UC) is not the only benefit people at foodbanks are experiencing issues
with, but it is a significant factor – half of referrals made due to ‘moving onto a different
benefit’ in the last year were related to Universal Credit.
4.28. The Trussell Trust report published in April 2018 ‘Left Behind: is Universal Credit truly
universal?’ analysed food banks in areas where the UC full service had been rolled out for a
year or more. The findings showed that these projects experienced an average increase of
52% in the 12 months after the roll-out date in the particular area. Comparative analysis of
random samples of foodbanks taken from 247 projects either not in full UC areas, or only in
full roll-out areas for up to 3 months, showed an average increase of 13%.
4.29. Many charities have issued new warnings on universal credit (UC). According to the Child
Poverty Action Group, people claiming universal credit cannot budget properly because of
variations in the way their benefit is calculated. Other issues lines in universal credit
claimants experiences changes in the date rent is due, which sometimes caused by people
moving house. This leads to people falling into debt and fluctuations in the amount of UC
households receive are also caused by changes in paydays and assessment dates (Rough
Justice).
4.30. The Croydon Foodbank (seeded by the Trussell Trust) supported 1,820 people in crisis in
2017 with three day – emergency food supplies
Review question 5 – Deprivation and poverty
Have we captured all the relevant issues concerning destitution and poverty?
The economy, jobs and incomes 4.31. A strong national and regional economy that provides numerous, reasonably paid jobs would
be a significant positive factor in helping to reduce homelessness in the long-term. Following
the longest economic downturn for over a century the UK economy has continued to
recover through into 2018, however, the uncertainty caused by Brexit is having an impact.
Homeless review 2018
4.32. The country’s employment rate is positive, however, there are also concerns about
productivity, earnings, and the number of people in part-time rather than full time
employment. In 2017 the International Monetary Fund expressed concern that although
developed economies were achieving very encouraging employment rates (in the UK 2017
saw the lowest unemployment rate for 42 years), this masked the nature of the
employment, with temporary, flexible and part time work putting downward pressure on
pay growth6.
Economic growth
4.33. The national economy continues to recover, however, more slowly than other developed
countries. This is positive for increasing employment, and provides more favourable
economic conditions for a reduction in homelessness. UK GDP rose 0.1% in the first three
months of 2018, its slowest growth since Quarter 4 2012. GDP per head, which adjusts for a
rising population, fell and was only 0.6% higher than a year earlier. Over the year to the first
quarter of 2018, the economy grew by 1.2%, well below its five-year average of 2.2% and the
slowest annual rate since the spring of 2012. The inflation rate has slightly fell since the last
quarter of 2017 from 2.7 to 2.4 and this trend is expected to continue throughout the first
two quarters of 2018
Employment
4.34. A higher proportion of people in Croydon are in employment than London or England, which
is encouraging for households looking to access market housing. In December 2017, 80.5% of
the working age population was economically active in comparison to 78.2% in London and
78.6% in England. However, unemployment increased to 7.8% in December 2017, an
increase of 2.1% since December 2016. The proportion of economically active people
decreased in Croydon has decreased from a high of 214,600 in 2016/17(July to June) to
208,800 in 2017/18 (April to March).
4.35. The GLA expects Croydon to produce 25,500 new jobs over the 25 years between 2011 and
2035. The prospects for the local economy are positive with the Westfield/Hammerson
regeneration of the Whitgift Shopping Centre likely to generate 16,000 new jobs in the
borough. However, Croydon has a high proportion of young people that are not in
employment and there are pockets of the borough where economic inactivity is high.
Employment sectors
4.36. Public sector, including health and education, is the sector employing the largest number of
employees in Croydon: between 36,000-37,000 people representing approximately 31% of
all employees. According to GLA London Market Projections (2017) manufacturing, transport
and storage, and wholesale are all recognised as sectors projected to decline over the next
20 years, and retail with very little employment growth per annum (0.1% per annum).
However, these sectors together employ around 26,000 people and over 22% of all
employees in Croydon, which is relatively higher than London as a whole.
6 “Rise of part-time work to blame for stunted pay growth, says IMF” The Telegraph (September 2017).
Homeless review 2018
4.37. The information, communication and construction sectors have showed the biggest increase
in numbers of employees from 2015 to 2016. Other sectors which also showed the biggest
increases are manufacturing, transport and storage, and the retail and wholesale sectors,
which are among to the contracting sectors according to the GLA projections (2017).
Section 4 Figure 5: Occupation Groups 2017
Qualifications
4.38. In terms of occupations Croydon’s economy is particularly reliant on the retail and public
sectors and there are few opportunities in knowledge-based industries. It also has a
relatively high proportion of public sector jobs and is likely to experience the impact of
government spending cuts more severely than other areas. However, there are also resilient
local employment clusters in the design and engineering, insurance and legal sectors. On
the other hand, the borough’s residents are better skilled than many parts of London – with
the borough performing just below the London average in terms of the proportion of
residents that have the top level skills (NVQ level 4 & 5). These high level skills are
increasingly required by future employers as London’s employment becomes increasingly
characterised by knowledge based industries.
4.39. The table below shows the number and percentage of Croydon residents aged 16-64 and the
level of qualifications they have attained, compared to the average for London and Great
Britain. Over the past twelve months there has been an increase in the number of residents
with qualifications (+34,000) and a decrease in the number with no qualifications (- 7,000).
Section 4 Table 2: Croydon Qualifications (2016)
Qualifications (Jan 2016-Dec 2016)
Croydon (No)
Croydon (%)
London (%)
Great Britain (%)
NVQ4 And Above 118,600 48 51.9 38.2
NVQ3 And Above 155,500 62.9 66.3 56.9
NVQ2 And Above 190,700 77.2 77.6 74.3
NVQ1 And Above 209,700 84.9 85.2 85.3
Other Qualifications 21,900 8.8 8.2 6.6
Homeless review 2018
No Qualifications 15,600 6.3 6.6 8
Earnings
4.40. During 2017, the inflation rate increased to a level above the growth in earnings, meaning
that average earnings in real terms were decreasing. The three months to February 2018,
however, saw average income growth starting to exceed inflation, and with inflation on a
downward trend recently should begin to ‘real’ average earnings should start to increase in
months to come7.
4.41. Average full time resident workers annual pay in England increased by 2.04 % from 2016 to
2017, the increase was 2.8% in London and 3.04% in Croydon over the same period. People
in Croydon earn less than the London average. Lower earnings increase problems with
housing affordability and the proportion of households able to access market housing. The
Annual Survey of Hours and Earnings (ASHE) 2017 shows median earnings for people
working full time living in Croydon IS £33,821 (for full time weekly pay for male residents
£690 and £585.4 for female residents). The full time resident workers annual pay is 5.8%
lower than London average and 16% higher than England’s average.
Welfare benefits
4.42. A high proportion of housing benefit claimants in Croydon are working. This indicates that
working households cannot afford market housing without additional support. In April 2018,
10,400 residents aged over 16 claimed housing benefit in Croydon. 52% of claimants were
social housing tenants and 48% were private tenants; 11,531 claimants were in employment,
5,205 were not in employment, 19,730 were on passported benefits and 51 claimants had
their employment status missing.
4.43. This is a mixed picture in terms of future levels of homelessness, as people require stable,
reasonably paid employment in order to access market housing and maintain this position in
the long-term.
Review question 6 - the economy
Have we captured all the relevant economic drivers of homelessness?
The housing market
4.44. The housing market has recovered since the financial crisis in 2007-8 and the residential
sales market has seen strong growth in prices and increasing sales volumes underpinned by
low interest rates. However, in 2017 there was a reduction in sales volumes in England and
Wales of 7% in the year to September 2017. The average price of a property in England in
March 2018 was £240,949. Property prices vary tremendously - most expensive property
7 Economic Indicators – House of Commons Library (May 2017)
Homeless review 2018
sold in April 2018 was of a detached property in the Royal Borough of Kensington and
Chelsea for £19.8m, and the cheapest was a terraced property in Burnley, Lancashire for
£17,500. The average price of a property in Croydon was £363,472. House prices have
increased by 4.0% in the year to March 2018, however, house prices decreased across
London, with prices in falling by 1.4%8. According to Hometrack in June 2018, the average
property price in Croydon in June 2018 was £383,600 and increase of 3.0% on the previous
12 months9.
4.45. Affordability continues to be a significant issue - on average a full-time worker in England
and Wales can expect to pay 7.8 times their annual salary purchasing a property. Copeland,
in the North West of England, was the most affordable area in 2017, with median house
prices being 2.7 times median earnings, and Kensington and Chelsea the most expensive
with median house prices being 40.7 times median earnings. In Croydon, the median price
paid for a property in the borough in the year ending September 2017 was £362,00010,
which is 10.7 times the median full time worker’s salary of £33,82111.
4.46. The housing market has ‘cooled’ in recent years with reductions in transactions and slowing
prices. Government policy in terms of proposed measures to increase supply, and subsidy
still tends to favour homeownership. Another major concern is the number of households in
the owner occupied sector with low interest/discounted mortgages that would be
vulnerable to repossession and homelessness should interest rates rise.
4.47. The size of the private rented sector has increased steadily over the past twenty years and at
the last census was the second largest housing tenure. The cost of renting is currently
greater than the cost of buying a home; however, for many it remains the housing sector
that is most readily accessible despite the impact of recent welfare reforms. One aspect of
the housing market that has had an impact on homelessness is competition for private
rented housing and recent welfare reforms have been significant in dissuading landlords
from offering their properties to households claiming benefits. As a result, the council spend
a lot of time finding trying to secure accommodation for homeless households, and to
prevent household from becoming homeless.
8 Official Statistics: UK House Price Index England – March 2018
https://www.gov.uk/government/publications/uk-house-price-index-england-march-2018/uk-house-price-
index-england-march-2018 9 https://www.hometrack.com/media/515774/hometrack-uk-cities-house-price-index-june-2018-london-city-
las.pdf?utm_source=hometrack&utm_medium=trade-email&utm_campaign=cities-index-
june&utm_source=Hometrack+Newsletters&utm_campaign=3f445c9581-
EMAIL_CAMPAIGN_2017_09_28_COPY_02&utm_medium=email&utm_term=0_71d79157a3-3f445c9581-
88314533 10 ONS Housing – Median house prices for administrative geographies: HPSSA dataset 9 11 ONS – ASHE Annual Pay – Gross 2017
Homeless review 2018
Section 4 Figure 6: Housing tenure 2017
4.48. Home ownership has fallen to its lowest level in a quarter of a century. Private renting has
nearly doubled since 2000. In 2016/17 in England, 63% of households were owner
occupiers, 20% were private renters and 18% were social renters12. In Croydon according to
the 2011 census 60% of households live in owner-occupied accommodation, 21% in private
rented and 17% in social housing.
12 English Housing Survey 2016 to 2017: headline report
9%
8%
83%
Local authority Housing association Private sector
Homeless review 2018
4.49. Croydon has a smaller proportion of social housing than many other London boroughs. Only
17% of housing in Croydon is social housing (26,414 homes, see Table 10 below). The council
finds it more difficult to absorb increases in homelessness than other London Boroughs and
relies on the private rented sector to meet this need.
4.50. The increase in house prices has slowed significantly, and prices in London have decreased.
House prices in England increased by 3.9% in the year to April 2018. In London, however,
house prices decreased by 0.7% for the first time in a decade prices fell by 3.2% in 2009.
London has shown a general slowdown in price rises since the middle of 2016. In Croydon
house prices fell by double the London decrease, 1.4% in the year to April 2018, and sales
volumes fell by more than 20% over the same period13. Price falls are partly due to
uncertainty over Brexit, as well as the increase in Stamp Duty as people are staying in the
same home for longer.
4.51. Private rents have increased by only 1% in the year to April 2018, and rents in London did
not increase at all14. Local Housing Allowance rates, however, are falling behind market
rents. Further research by the think tank Local Democracy Information Unit shows how
private rents are rising faster than wages. Private rents in England rose 16% between 2011
and 2017, while wages increased by 10%. According to Shelter England, the high cost of
renting privately affects people in cities such as Cambridge, Bristol and Birmingham, and
market towns such as Daventry, as well as London.
4.52. Private rents have increased slower than the rate of inflation and the increase in social rents.
However, despite this the average monthly rent in England in the year to September 2017
was £675 per month (£8,100 per year), and average rents in outer London are nearly double
that at £1295 per month (£15,540 per year). The difference between Local Housing
Allowance rates and median private sector rents (as at June 2018) are shown in the table
below:
Section 4 Table 3: Median Rents and Local Housing Allowance Rates (Croydon 2017)
Accommodation size
Median rent (Croydon – per month)
LHA rate (per month) Difference (per month)
Room £452 £368 £84
One bedroom £900 £768 £132
Two bedroom £1200 £968 £232
Three bedroom £1400 £1209 £191
Four bedroom £1760 £1537 £223
Source: GLA London Rents Map
4.53. With mortgages reaching their most affordable level in a decade, renting a property costs
more than buying one. Deposits required from first time buyers are a barrier to home
13 UK House Price Index England March 2018 14 ONS Index of Private Rental Prices
Homeless review 2018
ownership. In the last quarter of 2017, the average (mean) mortgage payment in England
was £669 per month15, whereas the average monthly rent was slightly higher at £675.
Typical mortgage payments represent 29% of homeowners’ disposable income, compared to
almost half (48%) in 2007, however, in London they represent 44% of disposable income.
The average private rent in England in 2017 represented 35% of median disposable Full-time
income. However, first time buyers are expected to put down increasingly large deposits,
with 19 Local authority areas requiring deposits of £100,000 (including Camden, and
Wandsworth). The average first time buyer deposit in Croydon in 2017 was £72,68116, more
than twice the median full time workers salary.
4.54. The Institute of Fiscal Studies (IFS) analysis shows that the overall proportion of the
population of Great Britain who live in rented accommodation has risen to 35%, up from
29% in the mid-1990s. However, this growth has been only been in the private sector not the
social housing sector, and it is heavily concentrated with young people. The IFS found that
only 12% of 15- to 34-year olds rented privately in the 1990s and this has since tripled to
37%.
4.55. Londoners spend more of their income on rent than renters elsewhere, and the differential
between London and the rest of the country as increased recently (IFS, 2017). In 2013-2015,
the average rent-to-income ratio among private renters was 40% in London. To put this into
15 Halifax report March 2018 https://static.halifax.co.uk/assets/pdf/media-centre/press-releases/2018-03-17-
most-affordable-mortgages-in-decade-press-release.pdf 16 Which - How much deposit are first-time buyers in your area paying? (Jan 2018)
https://www.which.co.uk/news/2018/02/how-much-deposit-are-first-time-buyers-in-your-area-paying/
Homeless review 2018
the perspective of homelessness, individuals are at a higher risk of becoming homeless when
their rent is close to half of their income.
4.56. Croydon's house prices (entry level and average) are significantly cheaper than the London
average. However, affordability is still a problem with lower quartile house prices are 12
times lower quartile incomes. Over the ten years to 2016, average house prices have
increased by 11% in England, and 19% in London. The average price of a property in Croydon
has increased by 23%, and property in the lower quartile (bottom 25%) of house prices in
Croydon has increased by 24% over the same period. A property in the bottom 25% of
house prices in Croydon is 12 times the lower quartile full time salary of someone living in
Croydon17, and would require a deposit of over £28,000 (for a 10% deposit).
Section 4 Figure 7: Median House prices (Croydon)
Source: ONS HPSSA Dataset 9. Median price paid for administrative geographies
4.57. The average affordable rent in England in 2012/13 was 68% of the market rent. Affordable
rents for larger sized properties are on the limits of affordability. In 2016-17, the average
(mean) rent (excluding services but including Housing Benefit) for households in the social
housing sector for a social rented home was £102 (£442 per month), 34% cheaper than the
average private rent. In Croydon the average social rent was £86 for a one bedroom
property, £103 for a two bedroom, £124 for a three bedroom and £141 for a four bedroom
property. Affordable rent is significantly more expensive than social rent, and the average
affordable rent was £104 for a one bedroom property, £135 for a two bedroom, £181 for a
three bedroom and £215 for a four bedroom property.
17 Calculated using the lower quartile full time salary from ONS – ASHE Annual Pay – Gross 2017(£23,739), and
the lower quartile house price from ONS Housing – Lower quartile house prices for administrative geographies:
HPSSA dataset 15 (£286,575)
£295,000 £306,000
£319,950 £325,000 £331,000 £338,000 £345,000 £353,595 £360,523 £365,000
£-
£50,000
£100,000
£150,000
£200,000
£250,000
£300,000
£350,000
£400,000
1
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Homeless review 2018
4.58. Shared ownership properties in some parts of London are out of the price range of lower
paid working households. In Croydon, however, shared ownership properties remain an
affordable option for some households. A 25% share in a one bedroom property would cost
£160 per week (including rent, service charge and mortgage) and a 35% share of a three
bedroom property costing £245 per week which is slightly higher than the affordable rents
above.
Housing supply 4.59. Government housing policy immediately after the Second World War was focused on
tackling the housing shortage. Between 1949 and 1978, local authorities built an average of
150,000 new homes a year and exceeded 200,000 new homes during the 1950s. Since then,
however, local authorities and housing associations have only been able to produce a
fraction of this output (on average less than 40,000 homes a year).
4.60. Funding for new affordable housing has also reduced significantly since 2010 and the
introduction of affordable rent (set at up to 80% of market rent) has required housing
associations to "lever in" a greater percentage of private sector finance to make up the
difference. The Government's recent initiatives to help increase the delivery of housing
overall including Help to buy and Get Britain Building fund have had an impact but output
still lags substantially behind housing need. Table 4 below sets out net capital expenditure as
part of the HCA Affordable Homes Programme from 2008/09 to 2016/17.
Section 4 Table 4: Homes and Communities Agency Affordable Homes Programme
Net capital expenditure (£million outturn)
2008/09 2,571
2009/10 3,712
2010/11 2,641
2011/12 1,626
2010/11 2,455
2011/12 1,451
2012/13 477
2013/14 431
2014/15 573
2015/16 247
2016/17 285 Source: UK Housing Review (Table 64)
4.61. Figure 6 below shows the relative contribution of private enterprise, housing associations
and local authorities to the provision of new homes in the UK from immediately after the
Second World War to 2016. It also clearly shows the rapid decline in local authority
housebuilding after 1979.
Homeless review 2018
Section 4 Figure 8: Housebuilding UK 1949-201618
4.62. Over the past ten years nine years Croydon, the housing stock has increased on average by a
net 1,368 additional dwellings per year. In total more than 13,680 net new homes have
been added19. Table 5 below shows the number of net additional dwellings delivered in
London and Croydon between 2007/08 and 2016/17. Net additions includes dwellings
created through change of use from office accommodation to residential under permitted
development rules.
Section 4 Table 5: Net additions to the dwelling stock – Croydon 2007-08 to 2016/1720
2007-08 1,183
2008-09 1,256
2009-10 1,098
2010-11 850
2011-12 707
2012-13 891
2013-14 1,295
2014-15 1,523
2015-16 2,044
2016/17 2,835
18 Table 241 House building: permanent dwellings completed, by tenure 19 Net additions measure the absolute increase in stock between one year and the next, including other losses
and gains (such as conversions, changes of use and demolitions). Source - Housing Flows Reconciliation (HFR),
the Greater London Authority and Regional Assembly joint returns. 20 Table 122: Net additional dwellings by LA district (CLG)
0
50,000
100,000
150,000
200,000
250,000
300,000
PrivateEnterprise
Housing Associations LocalAuthorities
Homeless review 2018
4.63. Table 6 below shows the contribution of new housing to the increase in the dwelling stock
over the past ten years in the form of housing completions. The level of housing
completions has fluctuated between around 500 and 1,500 over the past ten years, with the
exception of 2016/17, when the level of completions increased dramatically to over 3,600.
There has been considerable residential development started in Croydon, particularly in the
Opportunity Area quite recently and this development is now coming through as new
supply.
Section 4 TABLE 6: HOUSE BUILDING - NEW DWELLINGS COMPLETED 2007/08 TO 2016/1721
England London Croydon
2007-08 171,180 22,600 1,150
2008-09 141,290 20,450 780
2009-10 119,910 20,370 1,100
2010-11 107,870 15,450 490
2011-12 118,510 17,740 500
2012-13 107,980 16,530 650
2013-14 112,330 17,330 1,530
2014-15 124,640 18,780 930
2015-16 139,670 19,340 1,420
2016/17 147,930 20,610 3,670
4.64. The 2008 credit crunch, the subsequent extended economic downturn, housing market
stagnation and restricted mortgage lending had a significant effect on housing demand for
owner occupied housing and a subsequent knock on effect on new housing development in
Croydon. However, since 2013/14 housing starts have significantly increased, and have
averaged over 1,000 per year over the past 4 years. Table 7 below shows the number of
new dwellings started in England, London and Croydon over past ten years
Section 4 Table 7: Housing starts 2007/08 to 2016/17
England London Croydon
2007-08 171,780 20,560 1,190
2008-09 88,130 14,720 650
2009-10 95,560 15,110 450
2010-11 111,150 19,720 430
2011/12 110,820 19,900 420
2012/13 103,520 17,260 480
2013/14 135,410 21,760 1,960
2014/15 142,900 22,920 1,010
2015/16 143,530 21,820 840
21 Table 253: House building – new dwellings started and completed by LA district (CLG).
Homeless review 2018
2016/17 163,000 16,820 560
4.65. Table 8 below shows the number of affordable dwellings completed by housing associations
and the council in Croydon over the past ten years.
Section 4 Table 8: Affordable housing completions 2008-201722
Social rent
Affordable rent
Inter-mediate
Total affordable
2008/09 350 - 260 610
2009/10 480 - 550 1040
2010/11 560 - 200 760
2011/12 490 20 80 580
2012/13 150 20 110 280
2013/14 0 240 120 360
2014/15 60 750 170 980
2015/16 0 250 30 270
2016/17 20 80 90 190
Source: MHGLG Affordable housing supply statistics (AHS) 2016-17
4.66. According to the Centre for London, borough’s building plans show that 17 boroughs have
set up their own development companies and together plan to build a total of 12,700 homes
over the next five years. 14 other boroughs plan to build 10,900 homes using their in-house
teams. However, the Centre for London study reports that council are failing to realise their
full potential due to financial barriers, lack of internal capacity and expertise, and problems
setting up wholly-owned companies.
Empty homes
4.67. There were 605,981 vacant dwellings in England in 2017, 2.5% of the estimated dwelling
stock of 23,950,000. In Croydon, there were 3,693 empty dwellings in the borough in August
2018, an increase of 701 on the previous year, representing only just over 2% of the
estimated dwelling stock. To function efficiently housing markets require a small proportion
of dwellings to be empty to enable refurbishment, and adaptation between occupiers. Long-
term empty homes23 are a better indication of issues around low demand or pockets of
market inefficiency.
4.68. The Council’s records indicate that 1,882 of empty properties had been empty for more than
six months and can be classed as Long-Term Empty Properties. The Council’s Empty
Property Service is actively involved in 723 long-term empty dwellings, and is either working
with the owners of these properties, regularly monitoring them or taking enforcement
action to bring them back into use.
22 Source: MHGLG Affordable housing supply statistics (AHS) 2016-17 23 Long term empty dwellings are those that are unoccupied and substantially unfurnished for over six months.
Homeless review 2018
4.69. The figures for the Empty Property Service are set out below:
Year Returned to use Using EP Grant Using EP Loan
2017/18 103 18
2016/17 116 60 1
2015/16 117 63
• The ‘returned to use’ figure reflects those properties that were unoccupied for more
than six months prior to the council’s engagement with the owner. A property is
included only if the Empty Property Officer can demonstrate at least TWO significant
interventions that contributed to the property being re-occupied.
• The grant funding used in 2015/16 and 2016/17 was from the GLA on a lease and
repair basis and the council secured nomination rights over the tenancies for a
minimum five year period.
• The Empty Property Loan fund is a very low interest rate secured loan for a maximum
period of two years. The funds can be recycled once repaid.
• The Empty Property service currently has one full time Empty Property Officer. A
second Officer has recently been recruited and will start soon.
4.70. The Empty Property service has a target of 100 properties returned to use each year. With
the additional of a second Empty Property Officer this will be increased to 150 properties per
year. The Empty Property service also has an active enforcement programme to locate the
owners of empty properties and encourage non-cooperative ones to return their properties
to use. In recent years the Empty Property Officers have, with approval from the Secretary of
State for Housing, Communities and Local Government, purchased compulsorily two long
term empty properties in the borough against the wishes of the owner. This enforcement
action sends a message to other owners of long-term empty properties that the council
needs to inspect. Local authorities in England are being given powers to charge up to four
times as much council tax where a home is left empty for long periods of time. This comes
under the amendment to the Rating (Property in Common Occupation) and Council Tax
(Empty Dwellings) Bill.
Local authorities will be able to charge tripe council tax on homes left for five to ten
years and quadruple it one those empty for more than a decade Homes left empty for between two and five years would remain subject to council
tax being doubled, as proposed in March 2018. The 100% premium is due to come into force next April, with the 200% and 300%
premiums chargeable from 2020 and 2021.
4.71. Since 2013, councils have been able to charge a 50% premium if a home is empty for two
years or longer. A total of 291 out of 326 councils applied an empty homes premium in
2017/18, with all but three charging the maximum rate of 50%.24
24 ‘James Brokenshire provides stronger powers for councils to tackle empty homes’ – July 2018
https://www.gov.uk/government/news/james-brokenshire-provides-stronger-powers-for-councils-to-tackle-
empty-homes
Homeless review 2018
Targets and plans
4.72. Further Alterations to the London Plan (FALP) sets an annual target for Croydon of 1435 new
homes (105 more than the original London Plan target). However, the new draft London
Plan has doubled this target to 2,949 (refer to section 3 for more information).
Review question 7 – the housing market and housing supply
Have we captured all the relevant information on the housing market and
housing supply?
Contact details for feedback/comments on this section
Input and feedback can be provided in writing, by email, by telephone or via the survey on
our Get Involved web site. The information provided as part of this review will feed into
Croydon’s third Homelessness Strategy since the Homelessness Act 2002 was introduced.
To provide feedback or comments please write to: David Morris, Gateway Transformation
Programme Lead (Interim), Croydon Council, Bernard Weatherill House, 8 Mint Walk,
Croydon CR0 1EA, or email [email protected] .