When we first think of homelessness and rough sleeping, we often picture vulnerable people left out on city streets, begging for money or food. However, the root cause of this crisis extends far beyond this simplistic view and is further exacerbated by the economic challenges we are faced with in business and at home. Take for example the impact rising interest rates has had on the private rental market in UK housing.
Rising interest rates
In the Monetary Policy Committee meeting on 7th August 2023, we saw another increase in interest rates. The 14th consecutive increase not only means that consumers tighten their purse strings, but it also has a continued impact on the housing market. This particularly affects areas such as Greater Manchester where homeownership remains a distant dream for many due to soaring property prices.
When interest rates rise, so does the cost of borrowing. This makes it harder for business owners, families and individuals to access affordable mortgages. As a result, they’re compelled to continue renting, thus increasing the demand for affordable private rental properties. This surge in demand drives up rental prices, further squeezing an already tight housing market.
As rental costs and interest rates increase, tenants are likely to experience financial strain. Even the slightest increase in monthly rent can push vulnerable families and individuals to the brink of eviction. Potentially even leading to homelessness. The reduced affordability for lower-income households leaves tenants with limited options. This often forces them into substandard accommodation which can have severe health and safety implications.
The relationship between interest rates and the private rental market is a complex one. However, its impact on areas including Greater Manchester is undeniable. Individuals and families are left vulnerable to housing instability and homelessness. Between January and March of 2023, English councils received calls for help with homelessness from over 80,000 households – the highest number since these records began. Addressing this growing crisis requires a multifaceted approach, including affordable housing initiatives, rent controls and support for those at risk of eviction and homelessness…
PMD recognises the impact the challenging economic climate and is committed to providing support for those who are most vulnerable. Key members of PMD’s management team will be joining fellow business leaders in uniting to fight homelessness and change lives. Alongside others, John Platt, Callum Bull and Tom Brown are sleeping rough for a night as part of the Manchester CEO Sleepout in an attempt to raise funds for front line services attempting to tackle this epidemic.
John Platt, Head of Property Finance at PMD, commented: “CEO Sleepout is a fantastic organisation that continues to fight the good fight against the inequalities and injustices that are so prevalent within society, particularly the Manchester city region. We hope to raise awareness for the cause and raise funds for those who are most in need of help.”
Bianca Robinson, CEO of CEO Sleepout said:
“It is so important that leaders within Manchester’s business community, like John, get involved and get excited about what we’re trying to do. This year we’ve seen such a sharp rise in people becoming homeless – and this is not your typical rough sleeper. Women, children and young people are becoming homeless at an alarming rate. And in cities where there are just not enough affordable homes, there is nowhere for them to go. So, they are vulnerable to slum accommodation, unfit and unsafe temporary accommodation, or worse – out on the streets. In Manchester, it’s estimated that one in every 74 people are homeless. This has to change. In the absence of any effective action from the powers that be, my mission is. to galvanise leaders of SME and enterprise businesses to build actions into their business practices that contribute to social value – strengthening communities. Taking part in CEO Sleepout is the first step.”
John Platt, Callum Bull and Tom Brown will be participating in the Manchester CEO Sleepout at Emirates Old Trafford on 23rd October 2023. If you’d like to make a donation, you can do so here.
PMD Business Finance are an independent commercial finance broker servicing business owners in the UK. For more information on our funding solutions, visit our home page.