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.
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.
MORE ABOUT LETTINGFOCUS AND WHAT WE DO
LettingFocus.com is the home of Private Rented Sector Expertise and advice.
Services to Businesses and the Public Sector
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 services and products for private landlords.
We also write for property websites, speak at property shows and we are regularly quoted by the media.
Services for Private Landlords
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.
AT OUR WEBSITE LETTINGFOCUS.COM:
HOME PAGE OF THIS BLOG click here: Blog
To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the top right. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.
THE HOME PAGE OF OUR MAIN SITE : http://www.LettingFocus.com
For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click here: Consultancy and Seminars
For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice
TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING”
Our book is the highest selling property book in the UK. Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.
To JOIN our Free NEWSLETTER which goes to 2,000 people and contains regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.
Discounted Products for Landlords: Landlords Resources
This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)
For my random thoughts on property and personal finance, plus other random things that interest me from sports, to 80s and 90s Indy music, to tsunamis, to politics please see our TWITTER PAGE: Twitter
Copyright of Blog: David Lawrenson 2011. We pursue any copyright infringements.
LINK TO THIS BLOG OR TO OUR WEBSITE