We all want to see a reduction in homelessness. However, there is a conundrum around the private rented sector’s role in achieving this.
Social housing is on the long-term decline – it now equates to just 17% of all households, while the PRS has more than doubled in size over the past 10 to 15 years, accommodating nearly 20%. Councils have been pressed increasingly towards seeing the PRS as the main way to discharge their homelessness duties.
However, according to our latest research, the proportion of landlords willing to let to tenants in receipt of housing benefit has dropped from just under 40% in 2011 to 17% in 2017. At the same time, the number of families with children, young couples and white collar professionals in the PRS has increased.
This fall in landlords willing to let to these tenants is primarily down to the fact that benefits have not kept up with rent levels, leading to a greater risk of arrears.
For example, our latest research found that 68% of landlords with tenants on housing benefit have experienced arrears in the past year; a landlord who lets to tenants on benefits will have on average 3.3 tenants in arrears – the general average across all tenant types is 1.9 – and they will be owed an average of £2,263 in outstanding rent.
With a ready supply of alternative tenant types available, many landlords are moving away from the benefits market and leaving it to the larger, more experienced landlords or, worse, those who have few scruples about exploiting the vulnerability of those who can’t find housing anywhere else. Policymakers appear to keep their eyes firmly shut rather than see this trend.
The other aspect of the conundrum is that landlords are increasingly reluctant to engage with local authorities for a whole series of reasons. These include the implementation of licensing schemes, Article 4 directions, and what we call “gatekeeping”, whereby tenants served with a notice to end the tenancy are advised by the council to remain in the property until a court order for possession is made.
There’s a sense that most councils do little to help or understand landlords and are happy to paint the blackest picture of their impact on the community, but are then baffled when landlords are reluctant to engage or respond to attempts to work with them.
The over-riding challenge for councils that hope to be able to offer relatively affordable housing to fulfil their evolving duties under the Homelessness Reduction Act, will be how to give landlords the confidence to let to those at risk of homelessness.
We hope that they will find it is in their interests to work more proactively with landlords and demonstrate they can have confidence in their actions. They must be prepared to re-interpret guidance, recognise landlords’ legitimate business needs and work with the sector to package what they need to achieve in such a way as to minimise the additional risks presented by letting to those in danger of homelessness.
- In practice, we think this means:
- No longer advising tenants to ‘ignore’ section 21 notices that have been validly served
- Developing access schemes
- Offering assistance with deposits
- Re-introducing tenancy support officers, and giving them the objective of sustaining tenancies, working with the landlord and the tenant, not simply advising the tenant
- Financial incentives, such as golden handshakes, some form of rent guarantee or a leasing arrangement with repair guarantees.
Richard Lambert, chief executive, National Landlords Association
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