Social Letting Agency An approach for Local Letting Agency Models that works for Landlords

Some of our work at LettingFocus involves working with local authorities on setting up local or “social letting agencies” and “private rented sector access schemes.”

The aim of the various schemes is to try to encourage landlords to consider letting to tenants who are on housing benefits, who are vulnerably housed or who “present” to the local authority seeking a roof over their heads.

With the decline of the social housing sector, the housing solution (usually the only solution) the councils can offer will often be the private rented sector. But, the trouble for the councils is that so far the bulk of private landlords have been reluctant to engage with this end of the market, and especially with tenants on housing benefit (or Local Housing Allowance as it’s called.)

There are a variety of reasons for this, some of which we have discussed in previous blog posts here and at various public speaking events.

I don’t propose to go into the reasons why so many landlords don’t like this part of the market again here. Suffice to say that because of landlord antipathy towards the sector, the councils have been trying to come up with attractive incentives to get landlords interested.

Direct Lets and Lease Schemes

In the case of “Direct Lets” to tenants on housing benefit, incentives include payment of deposits, bonds to guarantee the state and condition of the property, the setting up of fast track systems to pay landlords direct and so on.

Also, there are the “Lease Schemes” in which a landlord can get a guaranteed, often fixed, rent for a period of 2, 3 or sometimes even more years.

It’s all designed to get landlords to make their properties available to this part of the population.

But I always explain to councils that there are seven reasons why this job will prove hard. These are as follows:

1 For too long borough’s strategies for using the private rented sector for housing have been tucked away on page 94 of their Housing Strategy papers, as an afterthought (though this is changing)

2. Even when they have a good product for private landlords, the landlords cannot easily find out exactly what it is the councils offer on the Net. Strategies to improve findability online are essential.

3. Even within a single borough, housing associations, council and other providers often compete with each other to offer the best product. This confuses landlords (and can be wasteful of resources too.)

4. The products offered are not communicated clearly and not reaching landlords in the places where landlords “shop” for their tenants or where they look for information.

5. The constant stream of news, much of it negative and misreported on Local Housing Allowance, especially in the last 2 years, has left landlords confused. (Some of the negative media originates with the councils’ own  representative bodies who have unfortunately exacerbated the “worry factor” in a valiant but failed bid to get the Coalition government at Westminster to “think again.”)

6. Recruitment policies for private rented sector access schemes too often look to recruit from borough Housing Departments when what’s needed is a private rented sector perspective.

7. Failure in delivery of the back end service to landlords can act as a stab in the back for the best designed and best communicated products.

The last point is worth dwelling on with some real life examples.

Real Life Examples

Recently I attended a council ran landlords event outside London. It was all going well until near the end when a number of landlords, on hearing the councils plan for the private rented sector, said things along the lines of, “That’s all very well, but why is the council telling my LHA tenant to stay put and wait for the bailiffs” and “Why has the council lost my tenants’ application forms?”

And just two weeks ago, a landlord wrote to me to complain that his East of England local authority was trying to reclaim overpaid rent to him because the tenant had left the property. As he said, “How am I to know this?” (Thanks to CT for the info on that one.)

Another landlord, from Surrey wrote to ask me if I knew a way around Lloyds Banking Group’s bizarre strategy to not allow landlords with mortgages with them to let under the Lease Scheme arrangements. Apparently, his council was no help at all in trying to resolve the problem.

Local authorities need to fix these back end issues too because a landlord who is failed will tell ten other people and destroy any other good work that the council has done.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Expertise and expertise and I’m David Lawrenson, a landlord and property investor myself for over 26 years and best known as the author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 26,000 copies sold (up to Feb 2011).

Services to Businesses and the Public Sector

Primarily we are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord, private rented sector and buy to let product strategies, marketing and services.

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We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.

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