Newham Council in London has announced a new preventative scheme to buy homes from landlords who are evicting tenants in order to prevent families from becoming homeless. The council has allocated an initial £20m to this scheme, intending to purchase approximately 44 properties at £450,000 each, including refurbishment costs. The goal of this initiative is to allow renters to continue living in their homes rather than relying on homelessness services.
This decision was prompted by the council being served eviction notices on 350 homes that it has been using for short-term accommodation. These homes, also known as nightly rented homes, have caused a significant budget deficit of £2m in the council’s homelessness budget. As a result, Newham Council aims to reduce its reliance on these properties and provide stable housing for vulnerable households.
Newham Council is not alone in this effort, as other local councils, such as Lewisham Council, are also considering purchasing rental properties to address homelessness. The cost of housing in London has become increasingly unaffordable, with single room prices surpassing £1,000. This housing crisis has led to a rise in Section 21 evictions, which are no-fault evictions that enable landlords to remove tenants without providing a reason. In April to June of this year, Section 21 evictions increased by 41%.
The preventative scheme by Newham Council aims to alleviate the pressure on landlords and provide stability for tenants facing eviction. Rising interest rates and escalating mortgage costs have added additional challenges for landlords in London, leading to an increase in those looking to sell their properties. However, selling now comes with the disadvantage of lower house prices compared to previous years.
Cllr Shaban Mohammed, Cabinet Member for Housing Management and Modernisation, emphasized the need for collaboration between local authorities and the government to address the housing crisis. He called for increased support and resources from the government to tackle issues such as raising the Local Housing Allowance, boosting homelessness prevention grants, and providing discretionary housing payments.
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