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

Homeless review 2018

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 david.2.morris@croydon.gov.uk .