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Suitability and affordability – Court of Appeal on assessing affordability


Paley v London Borough of Waltham Forest (2022) EWCA Civ 112

This was a second appeal to the Court of Appeal on the issue of whether Waltham Forest had taken to correct approach to assessing the affordability of an offer of a private tenancy in Stoke on Trent in discharge of their housing duty to Ms Paley and her four children (21, 15, 14 and 5). Ms Paley had become homeless following a section 21 notice on her previous tenancy where the landlord wanted to sell the property. In 2017 WF accepted the full housing duty. Ms P and family were put in temporary accommodation in Bexley. Following the end of DHP payments in 2019, Ms P began to accrue arrears on the temporary accommodation. In January 2020, Ms P was made the offer of a private tenancy in Stoke on Trent, 161 miles away. Ms P sought a review, on both location and affordability. The review upheld the decision, and Ms P appealed on 10 grounds. The appeal as dismissed.

Ms P then brought a second appeal on grounds that the officer had failed to make reasonable inquiries, and that the affordability assessment had been conducted without input from Ms P and was not conducted properly.

The Court of Appeal noted the statutory guidance at chapter 17 of the Homeless Code of Guidance for Local Authorities 2018. The Supreme Court decision in Samuels v Birmingham City Council (2019) UKSC 28 (our note) on affordability was also taken to apply to suitability, not just intentionality. The Court of Appeal decision in Patel v London Borough of Hackney (2021) EWCA Civ 897 (our note) was also considered.

The approach to affordability must be an objective one, not the subjective view of the review officer, and consider what were reasonable living expenses (other than rent) with regard to the person’s needs and those of the children (if any) including the promotion of their welfare.

In 2019, Ms P had provided WF with an ‘accommodation need form’ including her outgoings. This included “£29.50 a week for bus fares and £8.00 per week for taxis. The financial difficulties Ms Paley had fallen into whilst in temporary accommodation were reflected in her debt repayments which were listed as: ‘Judgment debt £35 weekly’ and ‘Equita debt £20 as weekly. Bailiff’.”

But the 2020 offer was based on figures that WF had ‘revised’.

It was on the basis of these figures that the local authority concluded that the Stoke property was affordable because, as per their table, Ms Paley had a ‘surplus’ of £10.70 per week. This was in the context of Ms Paley’s 2019 figures for utilities and shopping having been rounded down, there now being no allowance whatsoever for public transport (£37.50 per the 2019 budget), and nothing included as a contribution towards the repayment of her debts (£55 per the 2019 budget). Instead, a figure of £50 per week was put in the calculation as ‘Other’, which would have to cover all of the family’s clothing, transport, and school requirements, and all other reasonable outgoings for this family of five, as well as the servicing of her debts. It should be remembered that in addition to these omissions, £48 (or £46) a week of Ms Paley’s universal credit, which benefit had been calculated by reference to her reasonable living expenses, was to be re-routed from household expenditure to rent.

The review decision, despite submissions on affordability made on Ms P’s behalf, decided (as far as relevant):

Ms Addow, the Review Officer, set out details of the amenities near to the property. Specifically, she identified that there is a bus stop 3 minutes from the property, that the railway station is 30 minutes away and that the shopping mall, many of the shops and the bank are ‘a 15 minute journey on public transport’. She concluded in this respect therefore that Ms Paley would have ‘minimal difficulty’ in living in the area and ‘travelling to obtain medical care, groceries and accessing (your) finances’.

In the review it was accepted by Mrs Addow that living 161 miles from Waltham Forest would reduce the amount of visits Ms Paley could make to family and friends, and that therefore visits would have to be planned ‘in terms of affordable train fares’. Ms Addow went on to say that, as the journey is 2 hours by public transport and a 4-hour drive, it is a ‘reasonable journey to make’. She went on to highlight that the cost of an advance train ticket to Walthamstow station would be £56 for 2 adults and 3 children and that it would be significantly cheaper by coach.

Ms Addow asserted that the Accommodation Needs Form, the Affordability Assessment and the Benefit entitlement were, together, evidence that the property was affordable.

On the grounds of appeal, the Court of Appeal found that there was no basis for arguing that no reasonable local authority would not have made further inquiries into relations with the three younger children’s father. This had not been raised by Ms P. In any event, the whole process, including appellant’s right to make submissions in response to a ‘minded to’ letter or on review is part of the discharge of the duty to make enquiries by the local authority. This ground failed.

However, on affordability, Ms P succeeded.

WF, through Mr Grundy QC, argued that it could rely on the Jan 2020 assessment and “that it was in any event, unreasonable for Ms Paley to have any transport costs within her budget given that one of the schools which was able to offer a place to one of the children was within half an hour’s walk from the property.”

This did not go down well.

Such a starting point, namely that Ms Paley has no need of any transport costs, is somewhat bold when it is recollected that the 2012 Order specifically requires local authorities to take into account ‘accessibility of accommodation to local services, amenities and transport’ and that the 2018 Code includes at 17.46, ‘transport’ in its list of ‘basic essentials’. This is all the more the case given the detail with which the reviewing officer had engaged, even to the extent of having priced rail fares, recognising Ms Paley’s inevitable need to use public transport whether for her day-to-day needs or in order to visit her family on occasion. Conversely it should be noted that unlike the reviewing officer in Patel, Ms Addow did not actively engage with the budget put together in January 2020 and which budget was integral to her decision.

While it might be true that a local authority could rely on an updated affordability assessment prepared without input from the person owed the duty, that did not relieve the council of the duty to carry out such an assessment “in accordance with the 1996 Order and 2018 Code and which, as was highlighted in Patel ‘directed an enquiry into the needs of the particular applicant and her family and imposed an objective standard for determining whether any expenditure relied on to prove that the accommodation was unaffordable had been taken into account’.

The issue was not, as the review officer and the judge below had taken it, whether the exercise had been conducted properly (or could be deemed to have been) where the applicant did not challenge the Council’s figures on a review request.

WF had not met that duty.

Had the reviewing officer critically considered the assessment upon which affordability was in large part to be determined, it is hard to see how she would have reached the conclusion that she did. For example, in my judgment, such a narrow approach to transport costs in relation to a single parent with no car, cannot against the backdrop of the following matters, be judged to be a reasonable assessment on any objective basis.

i) Whilst a 30 minute walk to school might be reasonable on one view, it wholly deprives Ms Paley, as a mother, from choosing a school (for a child who has already moved once) by reference to the suitability of that school for her child. Even if one adopts the ‘cutting one’s cloth approach’, it still ignores the fact that there may be numerous perfectly sensible reasons why, from time to time, a child would need to get the bus to school, for example if on occasion they had a great deal to carry, or in terrible weather so they were not soaked when they got to school, or in the winter walking home for half an hour in the dark after any after school activities

ii) In justifying an offer of a property 161 miles away from her home area, the local authority specifically spelt out that Ms Paley would be able to visit her family in Waltham Forest as it was under 2 hours by public transport. Even if undertaken by night bus and not all the family went, that is a significant public transport cost and the duty imposed upon the local authority includes the need to ensure that applicants can maintain links with family and friends and their old support network

iii) The local authority themselves refer to the shops and bank being 15 minutes away by bus, how else is Ms Paley to get the shopping for a family of five home from one of the cheaper supermarkets other than by public transport or taxi?

Further, WF had submitted that Ms P’s debts were not a reasonable expense, or not at the rates she had been ordered to pay. While debt payments were not covered in the 1996 order, the 2018 Code at 17.46 did direct attention to consideration of the applicant’s particular circumstances.

In my judgment whilst Mr Grundy may well be right as to the amount Ms Paley pays each week to service these debts, the fact remains however that these are judgment debts. Perhaps it would be reasonable to expect Ms Paley to go back to the court to ask for a reduction in the weekly amounts she has to pay, but it is highly likely that Ms Paley will still be required to pay something, even if ‘only’ £5 or £10 a week, an amount which is still a substantial sum given her income

There was no basis to simply exclude the debt payments.

And finally, importantly, WF had failed to consider universal credit standard allowances on assessing income necessary for non housing essential needs. In this case, WF had failed to consider the effect of the benefit cap on Ms P:

The effect of the benefit cap is such that a figure of £48 (or £46) has been deducted from the essential needs aspect of Ms Paley’s universal credit as a consequence of the shortfall in the amount allocated towards payment of rent. The Supreme Court dismissed a challenge to the legality of the benefit cap in R (on the application of DA and others) v Secretary of State for Work and Pensions [2019] UKSC 21.In my judgment however, the fact that the government is permitted in law to impose such a cap, does not mean that a local authority can simply ignore its impact when assessing the affordability of a property.

Affordability was crucial.

It is quite understood that the reality for anyone living on universal credit is that there will be very little, if any, flex in the budget. A budget that will not, however objectively, cover what the local authority themselves described as “the outgoings which are needed for you to feed and clothe yourself and your household; to heat and light the property and to cover all other reasonable living expenses” is simply unsustainable and leads inevitably to rent arrears, likely eviction and, as a consequence, the applicant being deemed intentionally homeless. A local authority is acting irrationally if, in order to make the figures work, they simply omit expenditure which on any objective view would be reasonable for the particular applicant who is in receipt of universal credit, to incur in order to meet her objectively reasonable responsibilities and liabilities.

WF had failed to carry out an objective, evidence based, assessment of affordability. That was what they were required to do, regardless of whether the applicant raised any dispute on specific figures or not on review, and regardless of whether the Council had sought the applicant’s input.

In my judgment the local authority failed to prepare a budget by reference to the needs of this particular applicant and failed to pay due regard to the 1996 Order and the 2018 Code. Far from there being sufficient flexibility in the budget to allow, for example, routine but frugal use of public transport and the occasional visit to her family, the affordability budget provided by the local authority was inevitably going to plunge Ms Paley even further into debt and as a consequence, to put her and her children at risk of once again being rendered homeless. This time however, she would be deemed to be intentionally homeless, the Stoke property having been determined to have been affordable and the main housing duty thereby discharged. The global un-itemised figure of £50 a week identified as ‘other’ could not begin to cover Ms Paley’s reasonable expenses no matter how modest the level upon which they were calculated.

As a postscript, Ms P had subsequently relocated to a private tenancy in the south of England. WF argued that this meant that this appeal was academic. Ms P’s counsel pointed out, quite rightly, that it wasn’t. Success would mean that WF had not discharged duty, had a continuing housing duty and that Ms P could not be found intentionally homeless in leaving the Stoke property.


Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.


  1. Chris

    Dare I to suggest that the real villain of the piece – if one likes to look for that kind of thing in a narrative – is not Waltham Forest Council but the benefits cap, the application of which resulted in the £48 or £46 deduction from the benefit-dependent citizen’s Housing Benefit/Universal Credit. With that being what it is and with the level of rents being what they are and with the effects of same no longer being able to be mitigated through Discretionary Housing Allowance then local authorities are going to struggle a bit with their affordability decisions. As Lady Justice King says at para 76 of her judgment “.. the fact that the government is permitted in law to impose such a cap, does not mean that a local authority can simply ignore its impact when assessing the affordability of a property.” Will this mean that where a London local authority cannot get its affordability calculations to work for private sector accommodation located inside or outside of London then the applicant will be gently ushered into a secure council tenancy at a low rent? – or will it mean that applicants get pushed even further away? If the rent in Stoke-on-Trent is still too high then what about Hull … or whichever part of England has the cheapest rents?

    I don’t much like the idea that low-income families who may have roots in London going back generations will find themselves being pushed out of London and forced to live in Hull (or wherever) because of high private sector rent levels and the existence of the benefits cap but neither of those two things are within the control of any local authority. You may deeply dislike the idea or the existence of the benefits cap but it was, of course, enacted into law by a duly elected government and I don’t think it can be denied that it represents a manifestation of a certain political philosophy whether it is that ‘people should be better off in work than on benefits’ or, if you prefer to see it that way, that ‘no opportunity should be missed to make the lives of the poor that little bit more miserable’.

    • Giles Peaker

      The benefit cap is absolutely the issue. (Though WF did not cover themselves in glory). This is the absolutely predictable and predicted result of the arbitrary cap.

  2. Paul

    I think the real issue is not the benefit cap. There should be a cap on what private landlords are allowed to charge, or the ount of houses they are allowed to own. Then we wouldn’t need a cap.

  3. AndrewM

    There are mire villians. Is it really ok to “export the poor widowed seperated or divorced to the north”. Itis financial colonialism. It is almost contradictory in that how likely are you to be better off in work oop north than in Walthamstow, until you realise it discriminates, that a single parent of 4 will “always be on benefits” and that london is for those who haven’t fall on hard times.Too often it is the officials that make these decisions are not sacked or disciplined or the manifest error here not acknowledged until the court of appeal ( i have no words) have to mark their work.

  4. Ginny Thomson

    London can’t just export it’s poor people en masse, otherwise who will work its infrastructure?
    Universal Credit seems to be in ingenious way of insuring that wage bills are suppressed, but the cap suppressed them so much that the beneficiaries still can’t afford to live in it. All these successful people will end up collecting their own rubbish at this rate!


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