Prime Minister Burnham and the Manchester Housing Crisis

Andy Burnham could hardly have chosen a more appropriate housing priority for his first days as Prime Minister. His Government has announced an urgent national drive to end rough sleeping, supported by an additional £340 million, while he has also promised a substantial increase in council housebuilding.

That commitment deserves support. Nobody should have to sleep on the streets, and families should not be left for months or years in hotels, bed and breakfasts or other accommodation that was only ever intended to be temporary.

Before the Prime Minister settles on the policies that will deliver those ambitions, I would like to remind him of some research carried out in Manchester eight years ago by the late David Knox FCA.

David was well known to Property118 readers under his pseudonym, Appalled Landlord. He had a habit of finding official statistics that were being overlooked, following the money and asking what the figures were telling us about the direction of housing policy.

In December 2018, he turned his attention to the rapidly increasing cost of temporary accommodation in Manchester. What he found looked extraordinary at the time. With the benefit of hindsight, it looks more like an early warning of the national crisis we now face.

The warning from Manchester

David’s original article, Manchester’s temporary accommodation up nearly 500% in five years, drew upon figures obtained from Manchester City Council.

The council’s expenditure on temporary housing supplied through private agencies had risen from £1.6 million to just under £10 million in five years. Its separate bill for placing homeless people in bed and breakfast accommodation and hotels had increased from around £650,000 to £3 million.

The combined cost had therefore risen from approximately £2.25 million to almost £13 million, an increase of 478% in only five years.

David’s concern was not simply that Manchester was spending more money. It was that public policy appeared to be creating a vicious circle.

Ordinary landlords were being subjected to higher taxation, increasing regulation and rising operating costs. Some were increasing rents to remain viable, while others were selling. As affordable private rented homes became harder to find, more families were presenting to the council as homeless. The council then had to procure replacement accommodation, often from private providers, on short-term and considerably more expensive arrangements.

In other words, the state risked discouraging the provision of relatively inexpensive, long-term rented housing and then paying a premium to secure emergency housing after that supply had disappeared.

David believed the restriction of mortgage interest relief for individual landlords, generally known as Section 24, was contributing to that process. His article was not a controlled economic study and it would be wrong to suggest that one tax change, by itself, caused Manchester’s homelessness crisis. Housing pressures rarely have a single cause.

His broader commercial argument was nevertheless difficult to dismiss. When the cost and risk of supplying rental housing increase, investors respond. Some increase rents, some reduce investment and some sell. If demand remains unchanged, the inevitable consequence is greater competition for fewer homes.

Those who lose out first are generally not the wealthiest tenants. They are the people with low or irregular incomes, benefit dependency, poor credit histories, larger families, previous rent arrears or other circumstances that make them more difficult for a landlord to accommodate.

Manchester was an early warning, not an isolated failure

Property118 returned to David’s research earlier this year in Temporary accommodation costs have tripled since 2016 in line with Property118 predictions.

What looked like a local problem in 2018 has since become a national emergency.

On 31 December 2025, there were 134,210 households living in temporary accommodation in England. Of those, 85,800 were families with children. A total of 176,130 dependent children were living in accommodation that was supposedly temporary.

The word “temporary” is becoming increasingly misleading. Government figures show that the most common length of stay for a family with children is now between two and five years. More than 21,000 families fell into that category at the end of 2025. More than 50,000 households were living in nightly paid self-contained accommodation, a category that had increased by 17% in one year.

The human consequences are even more troubling than the financial cost. The Children’s Commissioner has highlighted families sharing bathrooms and kitchens with strangers, children growing up without privacy or space to play, and hundreds of families spending more than a year in bed and breakfast accommodation. Some have remained there for more than five years.

Manchester continues to experience these pressures. Manchester City Council recorded 4,678 homeless children in December 2025, many of them living in temporary accommodation. Figures presented to the council also showed 1,905 families in temporary accommodation during the summer of 2025. Some children were travelling long distances from their temporary placement to remain at their original school, adding further financial and emotional strain to families already facing housing insecurity.

This is the city Andy Burnham has led since 2017. He will therefore understand better than most that temporary accommodation is not merely an entry in a council budget. It disrupts education, separates families from support networks, damages physical and mental health and places additional demands on schools, social services and the NHS.

The cost of managing failure

The financial system supporting temporary accommodation is also breaking down.

The Local Government Association calculates that councils have already spent almost £1.5 billion more on temporary accommodation than they have recovered through the relevant housing benefit subsidy since 2017/18. Without reform, that cumulative funding gap is projected to reach approximately £3.9 billion by 2029/30.

In 2024/25 alone, councils spent £1.27 billion through housing benefit on temporary accommodation but recovered only £911 million from the Department for Work and Pensions, leaving local taxpayers to absorb a shortfall of almost £360 million. The LGA warns that the annual gap could rise to £595 million within five years.

That is only the subsidy shortfall. It does not represent the full economic and social cost of homelessness.

Every pound spent placing a family in an expensive hotel room is a pound that cannot be spent preventing homelessness, supporting an existing tenancy or investing in permanent housing. Councils are being forced to spend enormous sums managing the consequences of housing shortages after they have occurred.

This is why David Knox’s analysis remains relevant. He understood that prevention is not simply more compassionate than emergency intervention. It is usually much cheaper.

Council housing is necessary, but it cannot solve the immediate problem

Andy Burnham is right to support a substantial council housebuilding programme. Britain has failed to build enough social and affordable housing over many decades, while the sale of council homes has not been matched by replacement at anything approaching the required scale.

New council homes take time to plan, finance and build. Families need somewhere to live while those homes are being delivered.

The private rented sector is therefore not an optional extra that can be taxed and regulated without regard to the commercial consequences. It is an essential part of the housing system and will remain so for the foreseeable future.

When a landlord sells a property to an owner-occupier, the home does not disappear from the national housing stock. It does, though, disappear from the rental market. That distinction matters enormously to someone who cannot obtain a mortgage, has no realistic prospect of being offered a council home and needs somewhere to live now.

A responsible Government should therefore ask a simple question before introducing any new policy affecting landlords: will this measure increase or reduce the supply of homes available to rent?

That assessment should apply to taxation, licensing, rent regulation, possession rights, energy efficiency requirements and any proposed new property or wealth taxes. Each policy might appear reasonable when considered in isolation, but landlords make investment decisions based on the cumulative cost and risk of the entire system.

Property118 has already examined Andy Burnham’s previous positions on rent controls, licensing and property standards, together with concerns about property taxes that could further reduce investment in rented housing.

The purpose of raising these concerns is not to oppose higher standards or protect landlords who mistreat tenants. Criminal and negligent landlords should be dealt with firmly. The danger lies in creating a system in which responsible landlords conclude that the risks, costs and returns no longer justify continuing to provide housing.

Once those homes have left the rental market, councils may be forced to procure accommodation from hotels, letting agencies and specialist temporary accommodation providers at a far higher price.

Work with landlords instead of driving them away

There are already examples of councils working constructively with private landlords to reduce temporary accommodation.

As Property118 recently reported in Councils expand schemes with private landlords to tackle homelessness, some authorities are paying deposits and rent in advance, providing insurance-backed guarantees and supporting tenants during the early stages of their tenancies.

Mansfield District Council reported that one such scheme helped 80 people, including 49 children, move into private rented accommodation during its first year. The council acknowledged that it did not have enough council housing and that bed and breakfast accommodation was both expensive and unsuitable, particularly for families.

This is the type of practical partnership the new Government should encourage nationally. Many landlords would be willing to house people who might otherwise remain in temporary accommodation if councils provided realistic rents, dependable guarantees, sensible communication and support when difficulties arise.

The Government should also review Local Housing Allowance rates, the temporary accommodation subsidy system and the effect of Section 24 on the supply of homes at the more affordable end of the market.

None of these measures removes the need to build council homes. They recognise that the housing crisis is too urgent to wait for construction programmes that may take many years to deliver.

The question David Knox would ask

David Knox died before he could see how closely the national figures would follow the trajectory he identified in Manchester.

The most fitting way to remember his contribution is not to claim that he was right about every detail or that one policy caused the entire crisis. It is to adopt his habit of following the evidence and examining the commercial consequences of political decisions.

Andy Burnham has said that his Government wants to prevent problems rather than continually pay to manage failure. Housing policy provides an immediate opportunity to put that principle into practice.

Building more council homes is part of the answer. Ending rough sleeping is a worthy ambition. Neither objective will be achieved by making it progressively less attractive for responsible private landlords to provide the homes that millions of people currently rely upon.

The Prime Minister now has the power to break the cycle David identified in Manchester.

Before approving any new tax or regulation affecting the private rented sector, he should ask the question David would almost certainly have asked:

Will this create more homes for people to rent, or will it leave councils paying even more to accommodate the families who can no longer find one?