Accreditation Private Landlords and the Social Letting Agency Model

Key Point: Most private landlords don’t set high value on things like membership of accreditation schemes and property inspections offered by some councils as part of Local Letting Agency schemes designed to attract landlords. They won’t pay much for these features either – especially where a good private let alternative exists. Local authorities must be realistic about what landlords want and are prepared to pay for.

In the old days before the bankers and offshore tax havens destroyed the economy and when money was still around, local authorities regularly paid incentive fees to private landlords to make their properties available to let to people on housing waiting lists.

In the new tough environment that’s pretty much a thing of the past. Also possibly slowly going (or already gone) by the wayside are things like rent deposit schemes and other sweeteners for private landlords.

Not only do local authorities have less money to throw at landlords but the cuts to the previously generous Local Housing Allowance rates have made their job very much harder, making many landlords opt instead for higher rent “private lets” to people who are not on benefits.

And to make things even worse, local authorities will soon be able to discharge the main homelessness duty into the private rented sector – meaning someone in need of housing will not be able to refuse a reasonable offer of accommodation in the private rented sector.

This change will make the job of local authorities harder still – they will have to do more with a lot less.

Response of Local Authorities – the “Local Letting Agency Model”

The response of some local authorities to some of this is to set themselves up as Local or “Social Letting Agencies” offering a range of services to private landlords as an alternative to private letting agencies. (Letting agents, in many areas, will not deal with tenants on benefits.)

It’s good that local authorities are doing something positive. But we think some may be a tad over ambitious in what they are expecting landlords to pay for.

For example, private landlords will not pay much for things like property inspections, membership of accreditation schemes, repossession assistance and the like as part of the joy of housing a previously homeless person.

Guaranteed Rent

But they might pay, if in exchange for doing so, they get from the council, some element of guaranteed rent.

The reality is that rightly or wrongly, many private landlords see tenants on benefits, and especially previously homeless ones, as coming with high risk, high maintenance and at high costs to the landlord (both in terms of real costs like increased insurance premiums but also the landlords own “time costs”)

And outside of some well publicised and properly marketed university schemes, whilst accreditation schemes for landlords are very laudable (and authorities are rightly doing their best to raise standards), most private landlords are a very parsimonious lot who have little interest in being “accredited” unless there is some real and significant financial or other incentive (e.g. guaranteed rents or other help) in becoming so.

They aren’t that bothered about property inspections either and the mere mention of “assistance with repossession” (as at least one authority proposes) will likely make them run a mile.

The reality for any landlord trying to let anything more than a “downmarket property” in London and many other large town and cities, is that there is a thriving market in private lets. And good tenants from letting agents (or via the landlords own legwork) are easy to find right now, as can be seen from the rate of increases in private sector rents.

In other words, private landlords don’t need to pay councils for the right to get access to what they see as potentially risky tenants and for things like accreditation schemes unless there is real value in it for them.

Getting Real About What Private Landlords Will Pay For

Local authorities have a very hard job to do (and possibly the government is asking too much of them) but they have to get real quickly if they are to measure up to the task that they face in the new housing environment set for them by this government!

In this market, as well as improving the way they market to landlords, they must understand what services landlords want and what they are prepared to pay for. If not, they risk setting up expensive “social letting agencies” that won’t come close to achieving the desired objectives.

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