Cost of living crisis threatens homelessness surge – with the lowest income households spending 133% of their monthly income on rent, energy and bills

In a front-page story today, The Sunday Times is reporting a warning by Crisis that hundreds of thousands of low-paid workers could face homelessness and be left destitute this winter as a result of surging energy bills.

The paper references new analysis by Crisis comparing average household incomes against the average cost of rent, energy and food bills in January. It finds that the outgoings of the lowest income households – those earning on average £12,650 - would exceed their average monthly incomes by a third. This is based on an energy price cap of £4,500.* 

Crisis is concerned that for households in high rent areas or in poorly insulated homes, the situation could be even worse. 

In the worst-case scenario, the analysis suggests that at least 1.7 million renting households on the lowest incomes will be spending on average 133% of their monthly income on rent, food and energy in January, pushing many to the brink of homelessness and financial destitution.

The analysis also finds that for households with an average income of £22,615, 73% of this will be spent on rent, energy and food bills. For those earning £31,728 and £37,773 it will be 59% and 55% respectively. 

Matt Downie, Chief Executive of Crisis, said: “The situation could not be more desperate. For the poorest households the combined cost of rent, food and energy will exceed their income by a third. People cannot simply be expected to cut back. You can’t cut back on the absolute basics required to survive. Families will be left completely destitute if help is not forthcoming. The Government has already waited too long to provide reassurance to anxious households. They must act now to prevent soaring rates of homelessness becoming the tragic legacy of the turbulent economic times we are in.”

Last week, Crisis and Zoopla published new research showing that fewer than one in eight properties available for rent last year were affordable to those in receipt of housing benefit, leaving tens of thousands facing shortfalls in rent amidst the cost-of-living crisis.

ENDS

Notes to editors

*This price cap projection is based on a Resolution Foundation report from August 2022 that states that energy bills “are on course to exceed £4,500 at the start of 2023.” Other projections, including those by Cornwall Insight, anticipate the cap could rise even higher.

The analysis is based on a comparison of average household incomes within each income group to the anticipated combined average cost of rent (social and private), energy bills and food in January 2023 (when energy costs are expected to be highest). Data sourced from the ONS and Resolution Foundation.