Intentionally homeless due to affordability issues

In today’s economic climate, affordability can be a common reason for persons presenting as homeless. Many private rented tenants are finding it increasingly difficult to find enough money to cover their housing costs; even with the help of Local Housing Allowance.

A recent Court of Appeal case in England serves as a reminder to local authorities (our equivalent is the Northern Ireland Housing Executive) of the detailed reasoning required when deciding homelessness applications on the basis of affordability.

Financial assessment

In the case of  Farah v London Borough of Hillingdon [2014] EWCA Civ 359 the appellant was a private rented tenant. She was a lone parent of three children. She had a physical disability which limited her mobility. She was evicted from her private rented accommodation as a result of rent arrears. She presented to Hillingdon Council for assistance as a homeless person. In determining whether she was entitled to homelessness assistance the council examined her income and expenditure. On completion of their assessment, the Council decided that she could have afforded to pay her rent and therefore found her intentionally homeless.

Proper review

Ms F requested a review of that decision, and it was upheld by the Council on review. She then appealed to the County Court but was unsuccessful. However, at the Court of Appeal her appeal was allowed. The Court of Appeal found that there had not been a proper review as the review decision merely stated that the original decision was based on their affordability assessment which showed that the rent would have been affordable if Ms F had prioritised her spending. The Court of Appeal found that the Council had failed to give sufficient reasons for reaching their decision.
The upshot of this case is that local authorities should take affordability issues more seriously and should carry out a more detailed financial assessment. The Court of Appeal accepted that some of Ms F’s spending were not priorities, but that even with that there would still have been, on a proper analysis, evidence to show that there was a real shortfall between income and expenditure. This had been particularly the case whilst Ms F was repaying a social fund loan. The result means that a local authority should not find an applicant intentionally homeless on the basis that ‘some items in your weekly expenditure are exaggerated’ without detailing such items, stating by how much they are exaggerated and why they believe they are exaggerated; therefore, giving the applicant a proper basis on which to respond to the finding.

Court judgment of financial assessment

The court stated

“...as in all cases, the level of detail necessary will usually depend upon the issue to be decided and the facts of the particular case. In some cases it will be enough to say that the housing authority concluded that the amount spent on a particular form of expenditure was excessive or unnecessary without going into further detail or qualification. In other cases, where the tenant has produced and relied on a justification for the expenditure under review, a more detailed explanation of the reasons for rejecting those arguments may be required...The present case falls, in my view, into the latter category. The housing officer had already...made specific deductions in expenditure by removing the credit card and swimming payments. But he had not explained which of the remaining items was in his view excessive or why. Given that one of these items was the £50 spent on taxis (which was arguably essential) and the other items were money spent on food and clothing, it was, I think, incumbent on the reviewing officer to re-visit this part of the assessment and to explain why she had reached the same conclusion...The reviewing officer was under a statutory duty to review the decision which had been taken and the reasons for it. The decision in the present case was on any view a marginal one which called for a reasonable explanation of the key points on which the appellant failed...She was never told what other expenditure she should have postponed and the sums she spent on food, clothing and taxis were not so large or obviously excessive as to require no explanation for being treated as excessive. Nor is there any indication of how the social fund payments were factored into the decision...”

The full case report can be found at here