Archive for the ‘Housing Benefit’ Category

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The Private Rented Sector and Some Key Issues for Government

Wednesday, January 25th, 2012

I was quoted extensively at the Guardian Housing Network blog last week and I think it is worth highlighting the key points I made.

Why the PRS is in the News

1. The private rented sector (PRS) is increasingly in the news and will remain so, partly because of its growing size and partly because of rising rent levels, which after a quiet decade have begun to soar, especially in economically advantaged areas like London.

2. This has led to some calls for rent control, but we think this would be too hard to enforce in the real world competitive marketplace and likely to lead to tenants offering other payments to secure their desired property.

3. Rising rents, like growing house prices, are simply a consequence of a lack of housing and a bulging population. In this matter, the PRS is indivisible from the rest of the housing market and the solution is the same: we simply need more homes.

Buy to Let Lenders Have an Impact on Length of Tenancy Agreements

4. Despite popular perceptions, our findings and those of other studies, including a recent one from the National Landlords Association, are that the majority of landlords actually want to hold on to good tenants for a long time – sometimes even if it means they have to accept less than market rent.

5. However, if there is a mortgage on the property, landlords will usually be restricted to offering tenancy agreements with fixed terms of no more than a year, because terms and conditions in their buy-to-let mortgage. Our work with some of the lenders has challenged the logic of this and I’m sure we will see longer-term assured shorthold tenancies become the norm in the future.

Why Many Landlords Fight Shy of LHA Lets

6. Compared to “non-LHA lets”, letting a property to tenants who are dependent on Local Housing Allowance (LHA) is seen as a huge extra hassle for landlords for a whole host of reasons.

- In a private, non LHA let, a landlord is paid rent in advance and usually there will also be a deposit which can be claimed against in the event of damage (providing the landlord did a thorough inventory at start and end of the tenancy.) There is usually no deposit on LHA lets and local authority bonds  – where available – can be hard to claim against.

- Tenants on LHA have to complete a lot of paperwork to set up their claim and the Housing Benefit department can often be slow to process these and start payments. LHA awards can also stop without warning simply because the tenant’s eligibility for support has changed. Delays in set up and changes in eligibility threaten the tenant’s ability to pay the rent.

- Under buy-to-let mortgage conditions some lenders still don’t allow a landlord to let to “non working” people. Insurance can also cost more too.

- LHA payments are now limited by caps and also to the 30th percentile of local market rents, setting a limit to what landlords can charge.

- Constant tinkering with the system of LHA / Housing Benefit over the years has confused landlords. Many are no longer sure how it works, and therefore avoid lets to LHA dependent tenants altogether.

Only when these some of these differences and problems are removed will significant numbers of landlords be willing to let to tenants who are dependent on LHA.

Government, Licensing, Accreditation and Landlords – the Regulatory Battleground

7. There is more that councils could do to improve the way they work with private landlords while still driving out the small rogue element. In particular, they need to sharpen up the marketing of the products and solutions they have for the LHA end of the private landlord market, stop internal wasteful competition between local authorities and housing associations and think more like private landlords  – whose main enemies are cost, time, risk and “hassle”.

8. In the short term, national and local government resources should be shifted away from universal landlord accreditation and licensing and onto uncovering the worst landlords – those who abuse tenants and let unfit properties.

9. But in the medium term accreditation may be inevitable. When it comes, the focus should be on offering simple, easy to join schemes of real value to private landlords, and thus their tenant customers -with any surplus directed to unmasking rogue landlords, not lost to administration.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors 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 events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are 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 right of this page – where, 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

Four our main home page click here:  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: 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”

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Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us.We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

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Posted in Accredited Landlords, Buy to Let Mortgage Terms and Conditions, Housing Benefit, Landlord Accreditation, Landlord Regulation, Local Housing Allowance, Tenancy Agreement Length, Tenants Deposits | Comments Off

London Living Rent, Landlord Accreditation and Ken and Boris

Thursday, December 15th, 2011

David Lawrenson of LettingFocus worries about Ken Livingston’s idea of rent controls and says that that accreditation and registration schemes for landlords are not needed because the vast majority of landlord and tenants enjoy good relations and the minority of rogue landlords will never register anyway.

Oh dear, oh dear, I spend a nice day at a CIH Conference telling many good people from the local authorities how they could make a better job of their relationships with the private rented sector and when I come back, I find that at another conference taking place on the same day, Ken Livingston and Boris Johnson are doing their best to come up with schemes for the private rented sector that will be hard to make work and will likely fail in their objectives.

Ken Livingston

Ken’s idea is for some kind of rent control.

Mmm. This has been tried in the past, and of course, gave us Rachman and a whole bunch of equally nasty landlords back in the 1960s and 70s.

For the benefit of younger readers, what happened was that horrible landlords like Peter Rachman just ignored rent controls anyway. And if a brave and foolish person ever stood up for their rights, they would find their lives rapidly took a turn for the worse when Rachman’s goons came to pay a visit.

In the 1960s and 70s the majority of fair minded landlords who obeyed the rent controls (and didn’t ask for “side payments”) found that they could not make any money from letting property, so their properties often fell into disrepair and gradually they all sold up – which is why by 1988, the private rented sector in the UK was so tiny – with only about 8% of the total housing stock. (In 1945 it was about 50% of the stock).

This tiny private rented sector was a problem for the economy – it meant that without a flexible housing alternative, people couldn’t move easily for work, which is why the government of the day brought in the new assured shorthold tenancies, to create a flexible housing tenure.

New York not as Great as Ken Makes Out

Ken Livingston referred to the success of New York’s rent control. I don’t know too much about New York’s experience apart from the fact that I have a friend who lived there 3 years ago and who said that side payments were the norm (to avoid the controls) and it personally helped him get a property when he offered a “contribution” to his landlord’s favoured religious charity. (In his case it was useful to have been of the same faith as the landlord or else he would not have even got a viewing.)

People familiar with Greece and the old communist Eastern Europe would be more than familiar with this kind of side payment left in a brown envelope.

It’s not clear how would Ken stop this kind of cheating of a rent control system and how would it be enforced anyway.

I’ve always rather liked Ken and have tended to vote for him, but I think he needs a history lesson here. Or maybe just spend some time in Greece.

Not for Profit Letting Agency

Ken’s other idea was for a Not for Profit Letting Agency.

We have commented here at this blog on the issue of local authorities setting up Local Lettings Agencies and the like on numerous occasions. Please see the links under “Categories” and the “Tags”.

But just two observations for now: Most private letting agents work at weekends and evenings. We would just hope that any such letting agency is not staffed by local government officers, as when I call my council it’s pretty much dead after 5pm and at weekends!

I also found his comments rather generalistic. Most letting agencies are decent and the people who work in them are fair and whilst I agree that more regulation of agents is needed, to appear to paint them all as ogres was going too far.

Boris’s Brainwaves

Boris’s ideas are rather simpler.

He too is in favour of accrediting all private landlords.

This idea has a little merit but accreditation has to be light touch (as Rugg proposed) and low cost too – with all landlords accepted. And accreditation must be accompanied by a very tough approach on the tiny number of rogue landlords who deliberately and consistently treat tenants in an awful way, housing them in appalling properties which break the law.

What we must avoid do at all costs is the kind of system of landlord registration that they have in Scotland. This scheme costs a huge amount of money to set up and run, is clunky, inefficient and few rogue landlords have ever been bought to book. And the majority of good Scottish landlords see it as a tax on them (and hence their tenants) with little benefit for their tenants either.

In London, we fear the same thing could happen – the same bureaucracy, the same waste, the same failure to root out the rogue bad apples in the landlord universe.

I have commented at previous blog posts about the appalling Sheds with Beds situation in Southall where a national newspaper (not the council) found that rogue landlords were routinely abusing mostly migrant (often illegal migrant) tenants by housing them in appalling “sheds.” These “tenants” did not know their rights or cannot enforce them.

The Problem with Accreditation

Would accreditation help these poor souls in the sheds in Southall and elsewhere?

No, somehow, we don’t think their landlords will be in the front of the queue to be accredited. And their (often illegal) immigrant tenants will hardly be reporting them either!

All the same, Boris has ploughed on. His big idea is to make membership of accreditation schemes a condition for a landlord to be paid Housing Benefit direct.

The London Landlords Accreditation Scheme is one such scheme with laudable objectives and which is much loved by the great and the good in London’s councils. After all, it was invented by councils, so it tends to get a good press at County Hall.

But we think it is currently a tad too hard to get accredited on it, which is why LLAS accredited landlords are still small in number – (fewer UK landlords are accredited than have my book) – even though the scheme has been around for years.

Getting Paid Housing Benefit/ LHA Direct

In relation to Boris’s idea to link membership of it to receiving HB payments direct, we find ourselves baffled, because at the moment private landlords are hardly jumping over barriers to accept “benefit tenants” irrespective of whether they are paid LHA direct or not.

Making them join LLAS or some other accredited scheme as a pre-condition is not going to assist this situation.

Who Cares About Accreditation?

Boris and Ken could do well to pay heed to my survey of the 2,000 landlords on my mailing list. Not a single one said they had ever been asked by a tenant if they were accredited.

They should also re-read the Rugg Review – which clearly said that the vast majority of landlords and tenants in the PRS enjoy very good relationships – and try to avoid getting distracted by TV programmes which naturally highlight the very worst landlords and tenants.

If most landlords and tenants get along fine and as all rogues would ignore ignore a landlord register, we would ask – where is the need for it.

I’d hoped for a better understanding from both Boris and Ken of two basic truths:

One. That private rents (like house prices) are on the up because of a lack of housing and a rising population (which is not going to stop rising as long as the UK remains in the EU).

Two. That what’s really needed is for local authorities to start using their existing powers to deal with rogue landlords harshly. If accreditation can be shown to assist the driving out of the rogues then great, but it’s hard to see how it could actually do this.

Time for the Mayor of London hopefuls to think again, we think.

ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are advisors 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 events (send an email to david@LettingFocus.com to find out about our next event) and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are 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 right of this page = where, 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

Four our main home page click here:  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: 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 it 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 over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2011 and 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on why people with Ipods walk in front of cars and my (usually) liberal “take” on politics please see our Twitter page.

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Posted in Accredited Landlords, Boris Johnson, Generation Rent, Housing Benefit, Housing Strategy and the PRS, Ken Livingstone Rent Cap, Landlord Accreditation, Landlord Register and Licensing, Landlord Regulation, Landlords Register, Letting Agency Regulation, Local Housing Allowance, London Living Rent, Not for Profit Letting Agency, Private Rented Sector Regulation, Register of Landlords, Rising Rents | Comments Off

The Private Rented Sector Will Not Entertain Void Periods and Local Authorities and Housing Associations Need to Understand This

Monday, November 14th, 2011

Letting agents, local authorities and housing associations must start to understand that private landlords want to let fast and won’t entertain void periods. Many council and housing association schemes with private landlords fail to meet this need.

All smart landlords (and smart letting agents who know their business) know that minimisation of the “void period” is critical to success in making money as a private landlord.

For the uninitiated, the void period is the time that the property is not occupied by rent paying tenants, and any time a property is void costs a landlord money.

But too often I see properties that are being marketed by letting agents sitting empty for weeks on end – thus soaking up landlords’ cash. Local authorities and housing associations also fail in this.

Local Authorities and Housing Associations and Voids

Local authorities, trying to procure properties from private landlords usually don’t understand that speed of letting is of the essence, which is why their bill for other, more expensive temporary accommodation such as B&B type accommodation is soaring.

For example, a few years ago, in the Dover District council area in Kent where I let a property, a government backed private lease scheme was operating.

This promised a guaranteed rent if I sublet the property to them for three years with them then subletting the property on to people who might otherwise be homeless.

This sounded potentially attractive (and socially responsible too) until I learnt that it would be another two weeks before they could even book the appointment in to inspect my property!

And then I found out that their scheme (and the guaranteed rent) wouldn’t start until one of their tenants had said they wanted the property – and even then I would need to wait until all the cumbersome LHA approval processes had happened. Oh, and of course, the rent would be paid in arrears too.

Getting Real

Today I see lots of local authorities struggling to get private landlords to engage with them – either to give them their properties under private lease schemes or to let to LHA tenants under “Direct Lets” schemes.

Many local authorities in London offer fees over £1,000 as incentives to landlords if they will do a 12 month let, so desperate are they to get landlords engaged. (The fee makes up for the fact that their tenant clients won’t usually have any cash for a dilapidation deposit.)

But according to the landing page on some councils websites, the landlord would first be expected to sign an agreement with the tenant BEFORE the tenant has even had approval from the local authority that they qualify for Local Housing Allowance.

Even with the big fee, many landlords will be put off by the delay, because in London at least, few landlords are going to wait for weeks for a council to make appointments to inspect or for the rent, (guaranteed or otherwise), to start.

Councils (and some housing associations) operating like this are really operating in a weird sort of cloud cuckoo land; demonstrating how steeped they are in slow and cumbersome processes and how they are unable to understand the perspective of the private landlord where time delays and hassles equates directly to lost revenue.

Councils Need a Private Landlord Perspective

In my consultancy work with local authority’s private rented sector departments to date I have only met two people who are actually private landlords themselves.

In both cases, the schemes they were working to set up at their councils are at least beginning to take some account of the realities of the situation – which is that in a booming private rented sector, landlords will not entertain slow council processes that mean their properties sit empty.

How We Do It

In my own property letting business, I don’t let to LHA tenants – it’s too much hassle, currently.

I do all the advertising myself via Upad (See the link in the “Offers for Landlords”  section below) and I reference check the tenant applicant very carefully, making sure to choose someone who will be a good tenant.

I start advertising in the last 40 days before the current tenants leave (which is a clause written into my tenancy agreements) – with the intention being that, unless there is a redecoration needed, the new tenants can move in within a maximum of 3 days of the old ones moving out.

My properties are competitively priced so I know that the rent level I require will not hold enquirers back. After all, there is no point holding out for an extra £50 a month, if you then have a void period for a month on a £1,000 a month property, because that will take you 20 months to make up. And, if the property is furnished this void will also cost you in council tax payments too. And of course, you still need to pay the mortgage interest and insurance premiums (and the latter may be higher if the property in unoccupied over a long period.)

I have found that showing prospective tenants around when the old tenants are still there can often help let the property faster. This is especially true of part furnished or unfurnished properties. If the current tenants keep the place clean and tidy and have nice furnishings the property should let faster than when they have gone and the property is empty – because the prospective tenants will be able to “feel” the cosiness of a home and the lifestyle they could have.

Speaking Engagement

I’m booked to speak as a private rented sector expert at a forthcoming Chartered Institute of Housing event on the private rented sector in Cambridge in December.

If you are from a local authority of a housing association and you’d like to learn a little from me (and others) about how you might be able to do things differently, you should attend. I’m sure you will find the whole event interesting.

Let me know if you intend to come along. Click here for More: http://www.cih.org/events/display/vpathDCR/templatedata/cih/events/data/PRS

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy 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 events and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are 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 right of this page. 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

Click here:  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: 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 it 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 3,000 people just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE PRODUCTS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus as well as other random things from sport, to 80s and 90s Indy Music, to tsunamis and politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Avoid Void Periods, Housing Association Leasing Schemes, Housing Associations, Housing Benefit, Local Housing Allowance, Local authority Tips for Housing Departments, Private Leasing Schemes, Private Rented Sector Access Schemes, Private Sector Leasing Schemes, Procurement of Temporary Accommodation, Social Letting Agency | Comments Off

Universal Credit the Private Rented Sector and a Sense of Groundhog Day

Tuesday, October 18th, 2011

Summary: The government’s plan to normally pay the Local Housing Allowance part of the planned Universal Credit to tenants (not to landlords) reminds us of the film “Groundhog Day”.  Haven’t we been here before and did we not learn from what happened last time?

The Universal Credit was first announced at the Conservative Party Conference in 2010, though the idea has been floating around for while – and variants of it are highly popular on both left and right.

Indeed, I recall studying a version of this, as proposed by liberal economist, JE Meade, whilst at university, many aeons ago.

The thinking is that a Universal Credit would replace a number of other benefits, including Local Housing Allowance (LHA).

Good in Theory

It sounds good.

By implementing a single, universal credit, welfare administration costs could be cut and it would ensure that people who work would always have more money than those who do not work.

Unlike some existing benefits that have a 100% withdrawal rate, the universal credit would be gradually tapered away so that people will be unafraid to take on a job, even if it is only part time, because they will still keep most of the additional money they earn.

But within the proposals that are on the table at the moment, is the idea that the Housing Benefit (Local Housing Allowance) element, which tenants can currently elect to have paid direct to landlords will normally only be paid direct to tenants (who it is hoped won’t spend the cash on something else).

Been There, Done That

The plan to normally have the LHA paid direct to the tenant (as the main default option) has been tried before under the previous Labour administration.

Labour’s idea was that by paying the tenants direct, the recipients would become better at budgeting and somehow more responsible.

Of course, these were very laudable aims and are all well and good.

But back then, landlord and tenant groups as well as housing charities like Shelter and Crisis all found that these potential benefits, whilst laudable enough, were more than outweighed by the fact that, by paying tenants’ LHA direct to the tenant, even more private landlords would become unwilling to let to tenants who were dependent on LHA.

The landlords’ fear – which was shared by many of their tenants too – was that the money would be spent on things other than the rent, which would lead to arrears and eventual eviction.

Ways and Means

And so, under Labour ways and means were again found to pay the LHA direct to private landlords. For example, one work around was that LHA could be paid to a landlord if, by doing so, a tenancy could be sustained that would otherwise be cancelled.

All Change

As we have already been here before and learnt the consequences of what happens when tenants are unable to have their LHA paid direct to the landlord, it seems odd that the Government could be thinking of making the same mistake again.

It all reminds me of the film, “Groundhog Day” where a bored American Weatherman, played by Bill Murray was trapped and forced to relive the same day again and again.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy 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 events and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are 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

Click here:  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: 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 it 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 3,000 people just  send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus as well as other random things from sport, to 80s and 90s Indy Music, to tsunamis and politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Housing Benefit, Local Housing Allowance | Comments Off

Do Private Rented Sector Rents Follow LHA Rates

Tuesday, October 11th, 2011

An interesting new report from the Chartered Institute of Housing (CIH) and the British Property Federation (BPF) disputes claims from some in government that past rises in the housing benefit bill were caused by landlords increasing rents in order to take advantage of pre-determined benefit levels.

The report is called “Leading the Market” and it concluded that a more likely explanation was a change in the make-up of claimants as more families are affected by the recession in already expensive to rent in areas such as London and the South East.

The report found the amounts payable for the local housing allowance (LHA) in the private rented sector during an 18 month period following the start of the LHA scheme in 2008 actually fell in 61 percent of areas studied.

This analysis runs counter to comments made by Welfare Reform Minister Lord Freud in evidence to the Work and Pensions Inquiry on the Budget 2010 reforms.

In his submission, he quoted figures that showed housing benefit claimants’ payments went up 3 percent while the Rent Index declined by 5 percent in the period from November 2008 to February 2010.

The CIH and BPF say that whilst Lord Freud’s figures were right, his interpretation ignored other factors such as the changing geographical spread of and type of claimants, which they say were more likely to have contributed to the rising bill.

The CIH said that because LHA does not push up rents, so it logically cannot be used to bring them down again. Therefore the cuts to LHA would end up causing a great deal of hardship to a large number of households and without either the tax payer or households reaping the benefit.

At LettingFocus.com, we have been critical of past studies like this because the data sample was too small, but the data set in this particular study looks robust enough and the findings will add an interesting element to the debate about the impact of cuts in Housing Benefit levels on rents generally.

One thing we would say, though, is that in areas where enough people are on benefits (say 25% of all households and up) then the LHA rate in effect becomes the market rental rate and both influence and feed on each other.

Of course, our view is that there is a great deal more the local authorities could do to ensure that private landlords are not put off letting to people on housing benefits or to the homeless in general.

And if the useful findings in this CIH study deflect attention from the things that councils could and should be doing now, that would be a shame.

Please read the categories on “Housing Benefit” or “Private Rented Sector Access Schemes” over at the Categories or Tags section on the right to read more about what the local authorities could be doing.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Advice and consultancy.

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 events and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are 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

Click here:  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: 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 it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

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Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

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Accreditation Private Landlords and the Social Letting Agency Model

Tuesday, August 9th, 2011

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.

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

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Posted in Accommodation in private rented sector, Accredited Landlords, Discharge Homelessness Duty, Housing Benefit, Landlord Accreditation, Local Housing Allowance, Local authority Tips for Housing Departments, Private Rented Sector Access Schemes, Private Renting Schemes, Private Sector Leasing Schemes, Social Letting Agency | Comments Off

What Type of Tenant Is Best for Landlords

Tuesday, July 12th, 2011

People often ask me “What sort of tenants should I pick?”

My answer is “Well, that depends upon what type of property you have and what the local market demand (and supply) is like.” Of course, if you are any good at this business you’ll know to check where the tenant demand is likely to come from before you buy.

As I have noted here before, some landlords do very well letting to students and some do well letting to tenants who are on Local Housing Allowance (Housing  Benefit.) Still others, usually those with suitable up-market accommodation, tend to specialise in short term lets and / or are players in the corporate lettings market, (where a company pays the rent on behalf of their tenants.)

Assuming you have a choice, the best type of tenant really does just come down to the local market.

But in some places there is no choice anyway. For example, in parts of college towns dominated by big universities, families and working professionals just won’t be interested in renting a property where all the neighbours are party loving students and the area dies for 5 months of the year (during the college long vacations.) Equally, in economically depressed towns, tenants on Housing Benefit are the only tenant type there may be.

Hard Work

Without doubt though, some tenant groups can be harder work (though again, not always, and it very much depends upon the specific tenant you get.)

There are certainly many landlords who will steer clear of letting to students or letting to people on housing benefits or both groups. There will be a number of reasons why they might do this.

In the student market, the perception among many landlords is that students can take up a lot of management time and tend to not look after properties very well.

In the direct let to housing benefit tenants end of the lettings market, landlords are wary of the paperwork and fearful of the management time connected with sorting out rent payments that may start and stop if the tenant moves in and out of work.

There are other reasons that landlords may have to reject the options of letting to tenant groups such as these. Some of these are valid reasons, others are myths.

But the various difficulties can be overcome.

For example, for Housing Benefit tenants it’s always possible to get rent paid direct and some local authorities have supportive Housing Benefit staff who will sort out non payment problems fast. And once you have done the Housing Benefit paperwork once, you tend to get better at it plus you will learn to discern a good tenant applicant when you see one. In student lets, a good independent inventory and a chunky deposit will protect your asset if the students don’t look after the property properly.

Range of Tenant Types

In the markets where I operate, there is fortunately a wide range of tenant types to choose from. I tend to specialise in 2 bed freehold houses with gardens. And since there are plenty of working people in work, I don’t need to look at the student or Housing Benefit markets.

My applicants will be typically two sharers or a couple. Now, I know from experience that couples (either with or without kids) tend to look after the property better when they are living there than the sharing singles, though all my tenants have left all my properties in a tidy condition when they came to leave. (They do this because I do a thorough inventory and make it clear what I expect them to do in terms of cleaning in order to get their deposit back!)

The only disadvantage of two sharing singles (and women are as bad as men here) is that the place will be a bit more messy when they live there (compared to a couple) which makes it harder when you are doing viewings.

Empty pizza boxes left lying on the floor will tend to put off potential new tenants when they come to view. I know from experience that two sharing men will tend to stay a long time and generally much longer than two sharing women (who seem far more likely to fall out with each other than two sharing men do.)

Boyfriends will also tend to hang round and stay over at their girlfriends places more (than the other way round) which leads to more wear and tear too at the girlfriends’ house.

And the further from home the tenants are,  the longer they may have friends coming to stay for.This is particularly the case when letting to young singles whose country of origin (and mates) are several continents away. In these cases you may find your place being occupied by more than just the tenants, for most of the time.

Of course, these are generalities.

The key thing you must do is to select people who have a history of paying their rent in the past. You can only find this out if you do proper reference checks on the applicants.

If they always pay their rent on time, you will find you can live with empty pizza boxes left on the floor though you may, however, just have to wait until they have gone before you can start marketing it again.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Experts and advice.

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 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 containing 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

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Posted in Accommodation in private rented sector, Housing Benefit, Student Lettings, Tenant Types | Comments Off

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

Tuesday, July 5th, 2011

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

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Experts and advice.

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 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 containing 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

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Posted in Discharge Homelessness Duty, Housing Benefit, Local Housing Allowance, Local authority Tips for Housing Departments, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Private Sector Leasing Schemes, Social Letting Agency | Comments Off

Less Rent for Landlords Under LHA if they Agree to be Paid Direct

Tuesday, May 31st, 2011

The forthcoming Local Housing Allowance (LHA) caps and reductions have brought with them a range of technical and practical issues, including also impacts on landlords who never let to LHA tenants.

Statutory instruments SI #2835 2010 (which came into force 1 April 2011) allow local authorities slightly more discretion about whether to pay LHA directly to landlords. It states that direct payment may be used when: “the relevant authority considers that it will assist the claimant in securing or retaining a tenancy.”

The National Landlords Association (NLA) says, “This obviously implies that a local authority may choose to offer direct payment as an incentive to encourage landlords to accept the new lower rates of LHA. The policy has ‘discretion’ very much at its core – it is not a blanket declaration that landlords can have direct payment if they accept lower rents.”

The NLA seems cautiously optimistic that this measure will help to prevent some landlords exiting the market because of the immediate impact of the cuts. However, they add that it’s too early to assess the impact of the various LHA changes, not least because most tenants will not be affected until the end of this year.

Impact Will Be Different in Different Areas

Of course, the impact of the cuts to LHA is likely to vary considerably from market to market. As we have noted before at this blog, there are some areas across the country where the effect of the cuts will be relatively minor.

However, in others, most notably for some properties in the more-expensive-to-rent-in parts of London, the capped rate levels may not represent viable rents for landlords irrespective of the option to go for direct payments.

The net effect of the changes to LHA will likely see some landlords exit the LHA market, where other non-LHA-reliant potential tenants exist. Others will be able to make small cuts and may feel more confident about accepting smaller margins if payments can be made direct. And others may even be compelled to leave the PRS altogether if the figures don’t add up.

Whilst it is still too early to assess how great the effect will be, there is now lots of evidence of activity by some more central London boroughs who are trying to find accommodation for LHA dependent tenants in cheaper neighbouring boroughs.

We have suggested that the effect of moves like this will be to increase rents slightly in these neighbouring boroughs.

British Property Federation and “Del Boy”

Whilst the NLA has taken a fairly pragmatic view of this latest move the British Property Federation (BPF), have taken a very much more robust view.

At their website, the BPF has questioned the move, which according to them “Would see council staff having to wheel and deal with local landlords to reduce their rent in return for the comfort of (landlords) getting paid directly.”

Ian Fletcher, Director at the British Property Federation, said: “This is Del-Boy benefit policy. Seeking to trade a landlord’s right to be paid with the Government’s desire to reduce its expenditure. Landlords should expect to get paid for the housing they provide. That shouldn’t be contingent on lowering rents, or having to wait eight weeks (for arrears to build up) under the current system.”

He adds, “The Government would not dare treat other small businesses in such a way, but seems to think it is acceptable to allow people to rack up huge debts and treat landlords so badly.”

We would be interested in hearing what landlords who are reading this think and to what extent they agree with the BPF’s harder line or the NLA’s more pragmatic and participative approach.

Write to us at david@lettingfocus.com

There will be no blog nex week.

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.

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:

TO GO TO THE 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 specific topic.

THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles 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” 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 containing 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 a host of other random things that interest me from football, to 80s and 90s Indy music, to tsunamis, to politics please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Housing Benefit, Local Housing Allowance | Comments Off

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

Monday, May 23rd, 2011

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.

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Posted in Housing Benefit, Local Housing Allowance, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Social Letting Agency | Comments Off

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