The cost-of-living crisis and increases in private rents are set to cause a homelessness spike in the coming months, London boroughs have warned.

Research cited by London Councils revealed that fewer than one in 10 properties listed for private rent in the capital are affordable to Londoners who depend on welfare support for meeting their housing costs.

Undertaken by Savills after being commissioned by Capital Letters, the analysis also estimated 125,000 low-income households in the capital are at heightened risk of homelessness because their benefit entitlement now falls short of meeting their rent.

In order to support struggling renters, the Government should increase Local Housing Allowance (LHA) rates to cover at least 30% of local market rents, said London Councils.

Households who are eligible for LHA receive it as part of their housing benefit or Universal Credit payment to cover their housing costs if they have a private landlord. Just over 423,000 Londoners receive LHA.

Cllr Darren Rodwell, London Councils’ executive member for Regeneration, Housing & Planning, said: ‘The combination of rising rents and the worsening cost-of-living crisis means many tens of thousands of Londoners are at real risk of homelessness in the coming months.

‘Just as the Government boosted LHA to help households avoid homelessness during the pandemic, it’s vital that LHA is restored once again to cover at least 30% of market rents. Increasing LHA would bring much-needed relief to Londoners struggling with housing costs.

‘Without urgent action, we’re worried we’ll see growing numbers of low-income households unable to afford their rent and becoming homeless. The consequence for those Londoners could be devastating. We’re keen to work with ministers on this important issue, as tackling homelessness is a priority for us all.’

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