Discharging Homelessness Duty to the Private Rented Sector – but where is the Property in the PRS

Key Point:  We are concerned that whilst local authorities will, in theory, be able to discharge the homelessness duty into the private rented sector, the reality is that many councils may not have done enough to convince private landlords to make their property available to this end of the lettings market.

On Monday, I featured with a clutch of housing luminaries at the Guardian Housing Network Q&A session, which was all about “working with the private rented sector.”

This really boiled down to trying to figure out what local authorities and housing associations could do to better engage with the private rented sector.

I put my views forward online and the whole debate proved very useful. Followers of our work – whether landlords or organisations – will find the debate enlightening. You can read it in full at the bottom of this post.

At the end of the debate, Chairlady Kate McCann, asked us to summarise the key issues facing councils and other bodies in relation to engaging with the private rented sector.

I wrote some brief notes which you can see near the end of the Q&A and I have now expanded upon these here – as eight key points.

1.      Local authorities and housing associations must start to recognise the central role that government now has for the private rented sector (PRS). Action: Give the PRS more prominence in local housing strategy papers.

2.      Large numbers of private landlords are (1) confused by the huge number of changes to local housing allowance (LHA) rules and rates that have come in over the past two to three years, (2) do not realise they can be paid LHA direct in many cases and, (3) do not understand the difference between private sector Lease Schemes and Direct Let schemes. Action: Design clear communications to try to overcome the misunderstandings that private landlords have.

3.      Even within a single region, neighbouring local authorities, housing associations and other providers often compete with each other by offering different versions of similar products or the same product but with different incentives. This can confuse landlords (as well as being potentially wasteful of resources as the more savvy landlords play one provider off against another.) Action: Harmonise products and services unless you are convinced the benefits of competition outweigh the cost savings and simplicity gains from single products.

4.      Improve the marketing of what’s available for landlords. Even with simplified products it can be hard for landlords to find out exactly what it is that councils offer, especially on the internet. Action: Improve “findability” online. Utilise appropriate search engine optimisation techniques and communicate products clearly and in the online channels where landlords “shop” for their tenants or where they look for information.

5.      Action: Work much harder to counter any negative, misreported news and myths about the behaviour of tenants who are homeless or on Local Housing Allowance. Also, think carefully before signing up to campaigns which highlight the numbers of landlords who may exit the LHA market as these end up being read by landlords too and tend to generate their own momentum, leading to the feared result!

6.    Many mortgage lenders have mortgage terms and conditions which do not allow landlords to let properties to local authorities or housing associations under lease schemes. Some will not allow landlords to let to people on LHA either. Action: Request central government puts pressure on the Council of Mortgage Lenders to change this.

7.   Schemes to access the private rented sector must utilise some experience and perspectives from the landlord community outside of borough Housing Departments. Action: Widen recruitment pool to gain PRS experience and perspective.

8. Action: Understand that failure in delivery of the “back end service” to private landlords can act as a stab in the back for the best designed and best communicated products. For example, not communicating with landlords over why LHA payments have suddenly stopped, trying to claim overpaid LHA when a landlord could not possibly know that tenant’s circumstances have changed, telling a non paying tenant on LHA to ignore court orders and stay until the bailiffs come etc, will undo the best marketing and most innovative of schemes.

But Are Councils Doing Enough Now?

Local authorities will soon have the ability to “discharge the main homelessness duty into the private rented sector.”

This is a huge change and it means an applicant will no longer be able to reject a suitable offer of accommodation in the private rented sector.

The trouble for local authorities is the vast majority of private landlords (for the reasons I have highlighted above) are simply not prepared to make their properties available to this end of the market because they don’t think it’s worth the risk or, more often, because they simply don’t know what’s on offer.

In other words, whilst local authorities may, in theory, be able to discharge their duty, the reality is that there may not be enough PRS accommodation available to discharge it to.

Local authorities must urgently take action to address this issue. At present, we think not enough have grasped the nettle. They know that change is coming and they need to make urgent plans now.

The link to the debate is here: http://www.guardian.co.uk/housing-network/2011/jul/01/live-discussion-working-with-the-private-rented-sector

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