Homelessness could cost the government £2.6bn a year without action

The government is risking an additional £2.6bn in annual costs to the Treasury if it ignores the hundreds of thousands of people at risk of homelessness because they are behind on their rent, The Big Issue can reveal.

Analysis by The Big Issue estimates the combined cost to local services and prevention could be at least £2.6bn if 225,000 renters currently in arrears lose their homes. But that could be avoided with a £360m support package to pay off arrears.

So far Housing Secretary Michael Gove has promised a pot of £65m to support people in rent arrears. But The Big Issue’s Stop Mass Homelessness campaign is warning that failing to prevent renters from losing their homes could be costly.

“The cost of mass homelessness is too much to pay both financially and societally,” said Lord John Bird, founder of The Big Issue. “These figures are astonishing but go to show it is critical we act now to prevent this crisis.

“For Covid-19’s legacy to be a mass homelessness crisis would be unfathomable and unforgivable. Now is the time to ensure that doesn’t happen.”

Covid-19’s impact on the renters has left 225,000 tenants “probably” or “likely to” lose their home due to mounting debts built up during the pandemic, according to StepChange.

Figures from homelessness charity Crisis estimate costs to local authorities, support services, the NHS and the criminal justice system amount to £9,266 if a person is allowed to fall into homelessness for one year. Meanwhile the cost of preventing homelessness is only £2,263.

If the 225,000 renters did lose their homes in the months ahead and ended up homeless for a year, the cost could be around £2.2bn higher than paying off £360m in arrears now.

Jon Sparkes, chief executive at Crisis, told The Big Issue the figures “must act as a wake-up call” for the Westminster government. The charity boss also called on ministers to unfreeze housing benefit to ensure tenants can keep up with rising rents.

“Across the country, households continue to feel the financial pressures of the pandemic and are facing the very real possibility of losing their homes and being left with nowhere to go,” said Sparkes.

“While the £65m package of support for renters announced in recent months is welcome, it falls well short of what is desperately needed to prevent ​further homelessness.

“If the government is serious about ​rebuilding the country after the pandemic, ​a priority must be ensur​ing that people can remain in their homes, without fear of eviction. We cannot risk people losing their homes because of inaction – the price paid will not only cost the public purse millions more ​than if we prevented homelessness in the first place, but the cost to people’s lives will be much greater.”

The Big Issue launched the Stop Mass Homelessness campaign earlier this summer, warning of a pending homelessness crisis. Since then, many of the vital protections brought in by the government during the pandemic have been stopped. 

Alongside the figures, The Big Issue has created a tool to look up how many people are at risk of homelessness in your area and how the numbers have changed throughout the pandemic. 

The tool also gives concrete calls to action on how you can support the Stop Mass Homelessness campaign. 

As well as paying off rent arrears, The Big Issue is calling for an end to no-fault evictions as well as efforts to provide jobs and training in sustainable industries.

To sign the The Big Issue’s petition or to learn more about the Stop Mass Homelessness campaign head here.