Why Town Hall “Not for Profit” Letting Agencies Fail
Local authority schemes to attract private landlords to let to people with few housing options often fail. Here at LettingFocus, we explain why.
I was invited to speak at the Chartered Institute of Housing (CIH) Homelessness conference in Nottingham last week.
This is a big national event to which around 140 local authority and housing association staff from all around the UK journey to each year in order to learn all about “new approaches to allocations, letting and homelessness”.
The conference contained a lot about the nitty gritty of how local authorities allocate social housing – a fiendishly complex area with a lot of law around it. The seemingly ubiquitous Jan Luba did a very thorough and interesting presentation on the latest new law affecting this.
While Jan spoke, the town hall staff, seated around me busily scribbled notes – which is not surprising as the last thing they want to happen is for their local authority to be sued for misallocation of housing. (Local authorities being sued is something that happens a lot and naturally many of the folk doing the suing get legal aid. So, it’s vital that the housing staff know the law and how it should be applied).
The Private Rented Sector
Most of what we heard at the conference was around the subject of allocating social housing and I’m afraid to say that the understanding of the private rented sector at the other sessions I attended still left something to be desired.
Of course, that was what I was on the bill to address – and I did my best.
At one break out session I was able to enlighten the leader and private rented sector expert (as well as all who attended the session) that
1) Private landlords operating without an agent don’t have to physically hand over a deposit in the “insurance based” tenancy deposit scheme. Most just stick it in the bank and earn interest on it. (Another reason why local authority bond guarantees are a poor substitute).
2) The terms and conditions of most buy to let mortgages restrict landlords from issuing tenancies longer than a 12 months fixed term duration. And that many lenders also do not allow private landlords to let to tenants who are on housing benefit.
Senior Executive Lack of Understanding of the PRS
Later, I was interviewed on a panel debate by host, Mark Easton (BBC Home News Editor) along with Steve Partridge of the Chartered Institute of Housing.
I held back from my usual mantra that a key problem for the town halls is that they lack Councillors, senior executive staff (and often external advisors) who possess a deep understanding of the private rented sector. (I have done some work helping local authorities and housing associations with all aspects of their work with the private rented sector and did not wish to overly self promote).
But as most of the delegates at such conferences seem to come from junior and middle management level, perhaps I should not have held back from making that observation. (I am always left wondering why so few of the senior people from local authorities and housing associations seem to be at these useful events).
Why Lots of Local Letting Agency Models Fail
One point I did not hold back from making was about the lack of evaluation of past local authority schemes to engage with private landlords, so called Private Rented Sector Access Schemes. These are variously called “Social Letting Agencies”, “Local Letting Agencies” and “Not for Profit Letting Agencies”. (These are where the town hall provides a range of services to try to get private landlords to let to folk with few other housing options ).
To us, at LettingFocus, it’s as obvious as a ham sandwich that many such expensive ventures have failed to deliver. You just have to look at the lack of properties these ventures have online to appreciate that private landlords are not engaging.
The Crisis representative put this failure down, in part, to a lack of local research by local authorities to understand what local private landlords want.
That has some truth but the same issues are faced by private landords in Waltham Forest as in Lewisham. And Reading will be much the same as Bristol.
I think a bigger reason why so few succeed is a lack of real in depth understanding of the private rented sector – and that goes right to the top of the local authorities. It is this that must change and hiring consultants with no background in the private rented sector will not help change it.
At LettingFocus, we possess that expertise and can design and implement schemes that will actually work.
ABOUT LETTINGFOCUS
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We advise 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 portals, speak at property events and we are regularly quoted by the media.
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We help landlords and property investors by showing them how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk.
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