News

The challenges and opportunities in supported housing 

10 April 2025

A thought piece by Bill Tidnam, Chief Executive at Thames Reach, reflecting on the future of supported housing and its role in ending street homelessness

At Thames Reach, our vision is of a society where nobody need sleep rough, but we are increasingly concerned about the unintended consequences of new legislation that aims to tackle rogue-supported accommodation providers, but which could mean that it is more difficult for people to find a route off the streets.  

In an earlier piece, we wrote about the important role that hostels can play in ending rough sleeping and how change is required if they are to play this role effectively.

What we didn’t write about then was what fills the gap when good hostels and supported housing aren’t there.  Loopholes in legislation have made it relatively easy for investors to buy houses on the open market and then use these to provide accommodation for people who need ‘care, support, or supervision’.   

This is a loosely defined phrase which, if accepted, justifies much higher levels of housing benefit which can be claimed by the tenant and paid to the landlord. This higher rent is designed to compensate landlords for the additional running costs of this accommodation. 

This form of accommodation came to prominence in response to the widespread closure of supported housing in the twenty teens as a result of local authority cuts, and while this fills a gap, it has been exploited by some commercial players who have seen this as a way to generate a handsome return on their property investment.   

This, in turn, has led to the warehousing of people in poor accommodation with inadequate support and issues of anti-social behaviour where unrestricted development of such accommodation has taken place.   

It is to address these issues that Parliament approved a new piece of legislation- The Supported Housing (Regulatory Oversight) Act in 2023.   The government is now consulting on how this can be implemented.  The idea was good to clamp down on exploitative landlords to protect their tenants and to manage uncontrolled benefits expenditure, all things that we would support.  However, its scope is much wider, and as the government consults on the implementation of the Act, it is clear that there is very little understanding of the type of accommodation managed by organisations like Thames Reach and the impact that the Act could have on their ability to help people.  

Thames Reach runs hostels as transitional accommodation, typically aimed at people who are, or who have been, sleeping on the streets. They will often lack detailed assessments of the issues they face (indeed, that assessment is the function of some of the hostels we run). They will typically have lost previous accommodation because they owe rent, because they have fallen out with neighbours, or for any number of other reasons.  

The risk to services 

Generally, these hostels are built and owned by housing associations, but they are run by charities.  The charities are usually ‘commissioned’ by local authorities, who pay for a proportion of the costs of running the accommodation and of the costs of the staff who work there. In return, the local authorities have control over who the hostels house and are responsible for making sure that the service they provide is a good one.   

The consultation document is interesting.  It seems to envisage a world in which most accommodation is funded entirely through rental income provided by benefits.  This is problematic, partly because, to do this, rents (largely paid through benefits) would need to be much higher.   

As well as making a transition into work difficult or impossible for the people that live there, this model puts the much greater risk of running accommodation for people with significant disadvantages  — and often real difficulties in prioritising rent payment — on the charities that run them.  The danger is that charities will be forced to mitigate this risk by excluding the people who are most in need.   

Despite the increase in rough sleeping, there has been little investment in improving hostels or building new ones in recent years. This is because the revenue funding for the costs of running a hostel often does not match the (capital) investment needed to build or improve one.  Put simply, housing associations are unwilling to invest in a scheme when they don’t know if there will be money there to run it.   

In addition, the guidance envisages asking housing associations — who provide the accommodation but don’t run the hostels — to take responsibility for the quality of the service.  This is not what the majority of housing associations do. Even when it is, fulfilling this function will be expensive for them at a time when many already see supported housing as a marginal activity that distracts from their core business of building and maintaining mainstream housing.   

This added responsibility runs the risk of weighting the scales even further against housing associations’ involvement in supported housing to a point where they will withdraw.  

We would ask the government to listen, to take locally commissioned accommodation for people affected by rough sleeping out of the provision of the act, and to consider diverting some of the money that is currently paid in benefits to local authorities to allow them to properly pay for this essential accommodation.  Without this change, we are likely to see the closure of services, an even greater reliance on unsuitable accommodation, and more people spending longer on the streets.