Posts Tagged ‘Local Letting Agency Model’

Marketing to the Private Rented Sector and Selling to Landlords

Wednesday, October 1st, 2014

As part of our business consultancy at LettingFocus.com we advise organisations – both public and private – about how to connect with, market to and sell products and services to the growing private rented sector.

Some sectors are very good at marketing products and services to landlords and designing products that landlords actually want. Other sectors are middling and some sectors are downright awful.

I think one of the best supply-sectors is insurance (buildings insurance, rent guarantee insurance, legal insurance, appliance insurance etc.)

Probably the worst two big supply-sectors may be mortgage lenders (buy to let mortgages) and local government / housing associations (local letting agency models and other schemes to get landlords to let to people on housing benefit, become accredited / licenced etc.)

Insurance – Good at Marketing, Good at Product Design

One of the best sectors is the insurance sector. Why?

Well, in insurance there has been a lot of innovation in product design. We can see this strength just by looking at the rapid innovation over the last ten years in the building insurance product – a product that all landlords with freehold properties will buy at some point (unless they are very silly and like taking huge risks).

Here the nature of cover has evolved and diversified over time to meet landlords different needs.

This innovation has been led by insurance brokers, who have a good understanding of the market and what it wants – and are then able to convey this back to insurers, who seem to listen and respond.

The insurers and insurance brokers are also savvy at marketing. Look online and you can see that they are usually very effective at using the web to market their products effectively too.

Mortgage Lenders – The Jury Is Out

Mortgage lenders (with a few exceptions like Paragon, Aldermore, CHE and, to a lesser extent, YBS and TMW) are generally poor at product design, though the mortgage brokers are good at doing the marketing for them.

Though the buy to let mortgage has been around since 1996, lenders’ criteria for issuing loans are too often confusing and illogical and the product design is still very lacking.

There are huge profits to be gained for lenders who really understand the market – and can design buy to let mortgages that landlords really want and which are designed around landlords’ different needs.

The mortgage brokers understand all this – and they are also very effective marketeers. But for some reason the mortgage brokers (unlike their insurance broker counterparts) seem unable to get mortgage lenders to listen to them.

Most mainstream buy to let mortgages, therefore, still do not meet landlords needs. And good profits for the lenders (especially the banks and building societies) are going begging.

Local Government and The Housing Associations

Oh dear, this is a supply-sector that is mostly failing in its relationship with private landlords.

OK, I accept that both are partly non-commercial, but both need private landlords to house people.

Local government needs to get landlords on board to let to people with limited housing options, to join accreditation schemes and to make their properties safe. And increasingly, housing associations are getting into bed with institutional investors in “build to let” ventures.

There are a variety of products that the councils have for landlords – Social Letting Agencies, Guaranteed Rent Schemes, Deposit/ Rent Guarantee Schemes to name but three.

But in the majority of cases councils and housing associations have failed to market to landlords and tenants effectively, especially online, which is where most landlords and tenants now look for information.

Town Hall Politics

But why are they so often, so bad. I think there are two reasons:

1. POLITICS: Too often at the town halls, the private rented sector is seen by elected Councillors as a political football to be prodded and kicked about, as and when the need for votes arises.

To the frustration of the junior folk at the councils who work with the homeless (and also with potentially willing private landlords on the front line), this is reflected in a lot of the anti-landlord policy coming out of the town halls.

2. LACK OF KNOWLEDGE: Very few senior executives at the town halls (and few Councillors) come from a private rented sector background.

When they need advice from outside about how to connect with the private rent sector, they may very occasionally go to tender (or they may not), but they often hire experts who may know all about social housing, but who too often have little or no understanding of private landlords and how the private rented sector works.

The councils and the housing associations might as well hire an expert in chemical engineering, football management, oil surveying or tiddlywinks – because social housing is a whole world away from private rent.

The same criticism can be levelled at the housing charities and the London Assembly, where we have yet to meet a single staffer with experience gained at a high level in the private landlord sector.

OnLine Savvy

Often the worst failure is the councils’ lack of savvy online. So even when they design a decent product for landlords, it often fails because landlords on their patch don’t know about it, because it is not findable in the online world. We see lots of decent initiatives, potentially of interest to landlords, which fail to register on landlords’ radars, so very few landlords are ever got on board. (How many London landlords have even heard of the London Rental Standard?).

And because of this failure, poor people with few housing options continue to live in unsuitable accommodation, often in expensive B&B accommodation at great cost to local taxpayers – a bad outcome for both the homeless and for taxpayers.

ABOUT LETTINGFOCUS

Services to Businesses and the Public Sector

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.

David Lawrenson, founder of LettingFocus also writes for property portals, speaks at property events and is regularly quoted by the media.

Services for Private Landlords

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.

HOME PAGE OF THIS BLOG: Blog

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

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS: Property Advice

CLIENT TESTIMONIALS – from both organisations and private landlords: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling personal finance and property book in the UK. Click here to Find Out More and Buy it.

If you are from an organisation and would like to bulk buy, please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER Mailing which goes to over 3,500 people (as at Jan 2013) just send an email to david@LettingFocus.com

We do not send spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. 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: Landlords Resources

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Social Letting Agency

Wednesday, April 30th, 2014

Many local authorities and other public bodies are looking into setting up their own not-for-profit letting agencies to house people in the private rented sector. Sometimes these initiatives are called private rented sector access schemes. Most private landlords and /or commercial letting agencies would normally turn these types of tenants away, so this is quite a challenge.

At LettingFocus, we have helped public bodies setup social letting agencies. Here are what we think are some of the key points to consider when setting up a social or community lettings agency.

Get Stakeholder Buy In
This means the buy-in of all senior management – councillors and executives. But it also means you have to set out clearly what it is you are planning to do to both tenant and landlord groups – and involve them in steering groups, if appropriate.

And you must explain to commercial letting agents what it is you are setting up, so they are not worried about what they might otherwise see as unfair competition.

Be Realistic About the Challenges
Most private landlords do not let to low income and “benefit tenants” for a whole host of reasons. You have to counter all these objections and make letting to these people worth their while. This is never easy, but it can be done.

Unless you understand landlords’ possible objections, you will never succeed. You have to put yourselves in the mind set of landlords.

Timeliness
The social letting agency does not have to be open at weekends and in the evenings, but don’t think you can respond to a private landlord enquiry “some time next week”. That just won’t wash – landlords have a choice about who they let to – and they have a choice about the letting agency they deal with too.

You simply have to respond within 24 hrs.

Marketing
You must engage with private landlords in the right media, so they know what you have to offer. Think about raising your profile online more than worrying about landlord forums!
Most community letting agencies fail because landlords do not even know what is on offer, because they never get to hear about it, because the web landing page is not in existence or is not right, because they call the switchboard who mis-directs the call or because no one returns their call.

Most landlords in your area will look online – and will find you there, if you can be found at all. Don’t give up with landlord forums but most landlords in your areas do not go to go to your landlord forums.

Type of Landlord
Work hard to get the landlords you already have a relationship with (perhaps through bond schemes) to get them to put more of their properties in your social letting agency. It will be much easier to deal with these landlords than trying to explain the workings of the housing benefit system to new landlords who have no prior knowledge of how this works. But also avoid the temptation to have too many properties with just a few landlords. We say no more than 50% of the properties should be supplied by less than four landlords.

On Boarding and Removing Onerous Restrictions

Don’t require landlords to jump through unreasonable hurdles to qualify for your lettings service. If you require them to fill out huge documents for each property and you almost ask for the landlord’s inside leg measurement, or if you delay for a week before “inspecting” a property before giving it the go ahead, then you have failed to grasp the realities.

Sure, the properties must meet an acceptable standard, but they don’t have to be palaces either. If they were palaces, then the landlords who own them would not be putting them into your social letting agency scheme to get a rent at the 30th percentile of local reference rents, would they?

Measurement
Agree and put in place the right measures and report to the right people. Agree what success will look like before you start out.

Learning from Others Experiences
We contend that a lot of other social letting agency schemes that purport to be successful have not been properly audited – and we think many are not actually as successful as claimed.
By all means see what has been tried elsewhere, but take time to learn from the experiences of those who really understand the commercial realities of the private rented sector and what landlords want. If you do this, you can set up schemes that really will have a chance of working.

We can help you with this – see contact details below.

ABOUT LETTINGFOCUS

Services to Businesses and the Public Sector

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.

David Lawrenson, founder of LettingFocus also writes for property portals, speaks at property events and is regularly quoted by the media.

Services for Private Landlords

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.

HOME PAGE OF THIS BLOG: Blog

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

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS: Property Advice

CLIENT TESTIMONIALS – from both organisations and private landlords: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling personal finance and property book in the UK. Click here to Find Out More and Buy it.

If you are from an organisation and would like to bulk buy, please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER Mailing which goes to over 3,500 people (as at Jan 2013) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. 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: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENTS FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2014. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated roughly once a week.

TWITTER PAGE My thoughts on property, personal finance, plus a lot of other random things: Twitter

LINK TO THIS BLOG OR TO OUR WEBSITE


Rent to Rent, Guaranteed Rent and Housing Benefit

Wednesday, March 12th, 2014

Incredible though it may seem, many landlords entrusted to middlemen companies who said they would find them tenants and pay a guaranteed rent for a period of 3 or more years. Now, it seems, a few of these companies appears to have gone bust taking all the housing benefit rent money that had been paid over by the councils with them. Oh dear!

A good example was featured on the Channel 4 news recently and involved a company called London Housing Solutions.

We used to see many of these companies at property shows extolling what they offered to landlords. The pitch to landlords was usually along the lines of, “We will take away the hassle of finding and managing tenants for you and pay you a guaranteed rent for X number of years, whether the property is occupied or not, and we will even look after all the maintenance bills, so you don’t have to worry about anything”.

Sometimes the idea behind this is called “Rent to Rent” and it has attracted many entrepreneurs attracted to the private rented sector as a good place to make fast profits on the margins from the heady and deadly cocktail of time-stressed landlords and councils whose grasp of how the private rented sector works is weak.

So, how does it work?

Rent to Rent – How it Works

Step One
Well, first you need the kind of landlords who think that these kinds of middlemen companies are really offering a blue chip guarantee. Check – there are lots of the gullible and / or time constrained types of landlords out there.
Step Two
Then the middleman company need access to lots of tenants on housing benefit. Check – there is no shortage of these in London and the councils are more than happy to supply lots of them to any agency or landlord who knocks on their door.
Step Three
The middleman company / agent will sign a contract with the landlord saying it will pay an, ahem, “guaranteed rent”. The landlord will sign a document saying the middleman company is his agent, which then allows the middleman to contact the council and get lots of folk on housing benefit in to the property. In all cases, the people waiting for homes are in “housing need”, and this is crucial because it then allows the council to pay the housing benefit direct to the agent.

Often, but not always, the middleman company will pack in as many people as possible into a property, often on single room rents, to maximise their income. They then profit on the margin between what they get in from the state and what they pay the landlord.

Nothing illegal in any of this.

The council is just happy it has got some more people off their housing waiting list – and frankly often really does not care over much about the quality of the accommodation or even how many people live there, unless a complaint is made. (These days they may be too busy having their attention distracted trying to set up licensing schemes and such other nonsense!)

Of course, that is how it is supposed to work.

How the Model Fails

Where it all comes crashing down is either that the people behind the middlemen companies turn out to be fraudsters and one day skip to Brazil, or, as is more normally the case, the reality dawns on the middlemen “rent to rent” companies that the time and money costs of dealing with folk on housing benefit means there is actually no margin left in it for them, once they have paid the landlords.

Even with a linked maintenance company willing to do the usual letting agent trick of adding a hefty percentage to any repair bill, the model is still hard to make work. (Experienced folks know that there is a good reason why most landlords, commercial letting agents and some mortgage lenders do not deal with tenants who are on full housing benefit or house sharers / HMOs!).

When it all crashes we end up with landlords who have not been paid the “guaranteed” rent whilst councils say they paid the housing benefit to the middleman agency company in good faith. Cue much finger pointing and calls to legal teams. Meanwhile, the poor tenants face eviction (and they will, once again, end up on the councils housing waiting list).

In one of the most recent examples of this, we know for a fact that many landlords in SE London had flagged up to their local councils their concerns about the middlemen companies, (e.g. they were not being paid) – but the councils are alleged to have continued to pay out the housing benefit to the agents.

Councils Have To Improve Understanding of the PRS

To make the whole thing work for the middlemen companies, requires local councils who refuse to hire in real expertise from people who understand the private rented sector. As councils are too often usually a little uncertain about how to connect with private landlords to get them onside to make their properties available via the councils’ own efforts, they are often forced to use the middlemen.

Some local councils have often tried to set up local letting agencies of their own, under their control to avoid the types of problems shown in the Channel 4 news item. Usually, they have failed because they simply will not engage experts who really understand the private rented sector or because they try to do it in-house.

This is like asking your GP to design and build a plane. Your GP may be a bright guy or lady but I’m not going to take a test flight on their aeroplanes.

Occasionally, at LettingFocus.com we work with far sighted councils who want to set up their own letting agency to manage such schemes – and do it properly.

Footnote: Lawyers will be aware that where the middleman companies made representations that they were acting along with the consent or even guarantee of the councils, private landlords might have cause to look to the councils to make a claim for their losses. Councils must tread carefully.

ABOUT LETTINGFOCUS

Services to Businesses and the Public Sector

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.

Services for Private Landlords

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.

HOME PAGE OF THIS BLOG: Blog

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

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS: Property Advice

CLIENT TESTIMONIALS – from both organisations and private landlords: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling personal finance and property book in the UK. Click here to Find Out More and Buy it.

If you are from an organisation and would like to bulk buy, please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER Mailing which goes to over 3,500 people (as at Jan 2013) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. 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: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENTS FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2014. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated roughly once a week.

TWITTER PAGE My thoughts on property, personal finance, plus a lot of other random things: Twitter

LINK TO THIS BLOG OR TO OUR WEBSITE


London Local Authorities and the Private Rented Sector

Monday, April 15th, 2013

LettingFocus despairs of the approach adopted by one London Council in dealing with its private rented sector.

We have just been sent an invitation to tender from a London local authority.

In the invitation they identify that they need to do some work to improve their local private rented sector, which now forms a substantial 30% plus of all housing stock in this borough.

They go onto identify a series of very real problems that impact on local people in their borough – e.g. some sheds with beds, examples of poor management by some rogue “landlords” etc.

So far, so good.

But they then appear to come straight to the conclusion that the way to tackle the problems is potentially either with a licensing scheme and / or via setting up a “social” letting agency to be ran by the council and which would work to get private landlords letting to people on housing benefit.

However, they fail to ask whether a licensing scheme or a social letting agency is actually the best way to tackle the issues in the first place.

This is fundamentally wrong, in our opinion.

Monitoring and Enforcement

All the evidence I have seen, including from talking to practioners on the “front line” of housing and homelessness, is that the local authorities know very well who the rogue landlords are and they also know where the offending properties are.

The problems councils really face are these:

  1. lack of resources to go after the rogues,
  2. poorly joined up monitoring and enforcement by various arms of the councils and other agencies and
  3. sometimes insufficient fines levied once a successful prosecution is obtained.

Policy should be built around these facts first – and the tender should be about looking at a wider range of measures the council could implement right now – and for very little expenditure.

If it can be shown that a licensing scheme is the best way to achieve this, then fine. However, councils must be mindful that rogue operators are hardly likely to sign up and they should also be mindful of the Scottish registration scheme experience, reported elsewhere at this site: http://www.lettingfocus.com/blogs/index.php/tag/scottish-landlords-register/

Evidence

As to social letting agencies, yes this could potentially work, but we have yet to see sufficient evidence that any previous similar type of venture has proved cost effective.

It appears that past experiments in setting up social lettings agencies have achieved mixed results, at least in part, because they do not attract private landlords in any significant numbers to the schemes.

This is usually due to a failure to adequately address how to get landlords signed up., which is because most past social letting agency ventures tend to have no “online strategy” relying instead on accreditation schemes / council records which are far too small in numbers to generate volumes.

Back to Base

This council really needs to go back to first base and ask whether a landlords licensing scheme / social letting agency really is required or are there other potentially more efficient and effective alternatives.

Finally, we checked the council’s website. We found it had almost no information for tenants or landlords in the private rented sector.

Fixing this first would be a far better place to start than spending even an hour sending invitations for tenders to adjudge complex and overarching schemes which may very well not address the real issues that this council is facing.

ABOUT LETTINGFOCUS

Services to Businesses and the Public Sector

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.

Services for Private Landlords

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.

HOME PAGE OF THIS BLOG: Blog

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

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS: Property Advice

CLIENT TESTIMONIALS – from both organisations and private landlords: 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, please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER Mailing which goes to over 3,500 people (as at Jan 2013) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. 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: Landlords Resources

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENTS FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2013. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated roughly once a week.

TWITTER PAGE My thoughts on property, personal finance, plus a lot of other random things: Twitter

LINK TO THIS BLOG OR TO OUR WEBSITE

Why Town Hall “Not for Profit” Letting Agencies Fail

Wednesday, November 28th, 2012

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

Services to Businesses and the Public Sector

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.

Services for Private Landlords

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.

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 THE MAIN SITE

For our main home page click here:  http://www.LettingFocus.com

For general information 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 and get our latest 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, though we occasionally mail landlords about good products from third parties. 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

Please note we only allow selected advertisers to market their services.

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NEXT SEMINAR EVENTS FOR LANDLORDS:

We are now running events accross the UK on an occasional basis:  Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week.

TWITTER PAGE For my thoughts on property, personal finance, plus a lot of other random things,  see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

Council Schemes for Landlords and the Private Rented Sector are not making an Impact

Tuesday, August 21st, 2012
Councils’ failure to engage with private landlords means families could be needlessly placed in emergency temporary accommodation or out of their local borough.

Back in July, the Guardian newspaper published a piece of research I had just completed which showed how councils and housing associations are failing to engage private landlords with their various schemes.

I thought it worthwhile to reproduce the piece in full here – but the article with comments can be found online here: http://www.guardian.co.uk/housing-network/2012/jul/31/private-landlords-council-support-schemes?newsfeed=true

“In a desperately difficult housing market the housing solution that’s often put forward is the private rented sector (PRS).

Of course, the PRS has many drawbacks, but it’s not my intention here to look at the pros and cons of the sector as an answer to the crisis. I suspect its suitability (or not) will be a major talking point when the Montague report, which looks into the barriers to institutional investment in private rent, is published.

Instead, I want to look at private landlords’ willingness to work with councils to address the housing crisis.

Background

The background is that most parts of the UK, and London in particular, has a problem of a lack of housing supply.

The latest statistics from Shelter show that there are almost 37,000 households in temporary accommodation in London and 10 times as many on council waiting lists.

We know that council-run accreditation schemes have been marketed to landlords for a long time and at some cost, but the number of landlords signed up remains stubbornly low. There are a range of lease schemes in which a landlord can get a guaranteed rent from a local authority or housing association for a number of years. There are a variety of rent and deposit guarantee schemes, often designed to ease the risk that landlords perceive in letting to people in need of temporary accommodation.

Yet too often these products have failed to be promoted to landlords.

Lack of Impact Amongst Landlords

At LettingFocus, we asked 40 private landlords who are on our mailing list and who have properties in 12 London boroughs to find out whether they were aware of such schemes and what they thought of them.

Only two out of the 40 landlords had ever joined an accreditation scheme. Another two landlords were members of a landlords association. Only four out of the 40 were aware of local authority or housing association schemes such as rent or deposit guarantee schemes, even though all but two of the boroughs offered them.

Once we explained what these products involved, there was a strong interest from landlords, especially for lease schemes, with landlords particularly attracted to the chance to enjoy guaranteed rent, reduce voids and eliminate letting agency costs.

Two of the landlords had tried lease schemes already and one had tried a deposit guarantee scheme. They reported a reasonable experience, although both said they took too long to set up. They also said that local authority staff often did not seem to understand the time pressures that private landlords were under. Information was also sometimes considered incoherent or contradictory.

It is a great shame that so many private landlords seem willing and ready to offer accommodation to vulnerable households but local authorities and housing associations are unable to engage them. The result is that many vulnerable households end up in expensive emergency B&B accommodation or moved out of the borough altogether.”

Responses

The piece drew some strong support from one outspoken council worker who added these comments online in response….

“Councils have so much to bring to the table but they don’t know how to do it and PRS landlords don’t know what we’ve got or how to get it. …… It is a lack of understanding but it is driven by an entrenched public sector mindset that few can break out of……… If you say ‘This is what the council does’ and then expect landlords to work with you it won’t happen and yet this is what I see so many councils doing. They want to get on board, they see the need for it but they just dont know how to go about it because they can’t shake off the traditional and habitual role……… I think it is the speed that frightens local authorities. PRS people can come up with a good idea in the morning and just get on the phone and make it happen by afternoon but councils have to hold meeting after meeting for months, form project groups etc and it takes an age……..I know lots of people who do frontline people-facing work like myself who are full of energy and enthusiasm for PRS/Public partnerships but it gets squashed out of them by the weight of tradition and office politics.”

Over the next two months we will be doing further research into what local authorities offer private landlords and how they do it.

We hope to publish this in the autumn.

Your Experience

To assist this work, we would like to hear from private landlords about what your experience with local authorities and housing association has been like.

And we would also especially like to hear from other council and housing association workers too – you can, of course, do this in confidence if you prefer. Our email address is listed below.

ABOUT LETTINGFOCUS

Services to Businesses and the Public Sector

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 (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 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.

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 THE MAIN SITE

For our main home page click here:  http://www.LettingFocus.com

For general information 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

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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.

LINK TO THIS BLOG OR TO OUR WEBSITE

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

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

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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