Thousands of homeless families trapped in debt and denied social housing

Nearly 4,000 homeless households in England are barred from applying for social housing because they are in debt, an exclusive story by i News has revealed.

Among them are more than 1,600 families with children who are forced to stay in temporary accommodation, as they are unable to bid for a permanent place to live through their local council.

Data obtained through freedom of information requests exposes a little-known rule that is punishing homeless people for their debt, according to Katherine Brickell, professor of urban studies at King's College London.

She describes the practice as a "Kafkaesque nightmare" that traps low-income families in a cycle of homelessness and debt.

A hidden scandal

The true scale of this problem is likely much greater than the figures suggest.

Professor Brickell estimates that the number of households trapped in temporary accommodation due to debt could be in the "tens of thousands," as some large London councils didn’t provide any details.

Over 200 local authorities in England have policies that disqualify or deprioritise prospective tenants from bidding on social housing if they have rent or council tax arrears.

This practice is particularly unfair because debt is often the reason people become homeless and end up in temporary accommodation in the first place.

"Debt causes homelessness when someone cannot afford their rent and gets evicted," explained Professor Brickell. "This is a trap homeless families cannot get out of."

The housing benefit black hole

The number of low-income households evicted due to rent arrears has increased quickly in recent years.

This is largely because of a mismatch between soaring private rents and inadequate state support through housing benefit and universal credit.

Poverty and homelessness experts have warned of a growing "housing benefit black hole" that is pushing more families into homelessness.

Latest government figures show that 117,450 households were living in temporary accommodation at the end of March 2024, a 12.3% increase from the previous year.

Nearly 75,000 of these households were families with children, raising concerns about the safety and suitability of temporary accommodation for vulnerable young people.

A call for action

Professor Brickell has called on the government to take moral responsibility for the housing allocation rules punishing indebted homeless families across the country.

The government has said that it will consider these findings as part of its plans to make sure everyone gets access to the support they need.

But urgent action is needed to address the root causes of this crisis, including:

• increasing housing benefit and universal credit to match the rising cost of private rents
• investing in more affordable social housing to reduce reliance on temporary accommodation
• reviewing housing policies to make sure they do not unfairly penalise homeless families in debt

Are you facing homelessness?

If your debts are stopping you from securing housing, give us a ring and we’ll give you free, impartial money advice.

We can check what financial help you might be entitled to and suggest some solutions that might be suitable for you. Some solutions are free, others have a fee.

Or if your landlord is trying to evict you, read our guide on what to do if you’re facing eviction.