Private Rented Sector Access Schemes, Local letting Agencies & Choice Based Lettings - A Criticism by LettingFocus

In our consultancy work for housing associations and local authorities, looking at Private Rented Sector Access Schemes and so called "Local Letting Agency Models," we have seen that the public sector provides lots of different incentives such as Rent in Advance Schemes, Deposit Bonds, Finders fees and the like to get landlords to let to people on low income who are dependent on Local Housing Allowance.

The incentives have been assiduously studied and evaluated on cost grounds by the providers. There has been some especially good work by Crisis and Shelter on this.

However, we have not yet seen any piece of really good research which looks in detail at the value to landlords of the different incentive offers that are used by RSLs and local authorities. (Only the National Landlords Association touched on it as part of a wider research piece but it barely scratched the surface of this question.)
The charity Crisis rightly highlighted the danger of "incentive inflation" as RSLs and local authorities compete to get landlords to give them their properties.
This was a step in the right direction but what's the payoff in terms of benefits to the public purse?

In the absence of more research on this, we at the LettingFocus consultancy say that local authorities are in danger of providing offers that may be OK for the the landlord, but which may not be the best option from the taxpayers point of view.

We thought the Rugg Review was super, but even that review missed this important point.

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Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years.
Primarily, I work as a consultant to banks, local authorities, social housing providers and other organisations – helping them with their landlord facing and buy to let product strategies and services.

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Local Letting Agency and PRivate Rented Sector Access Schemes. Local Authorities Engage With Landlords by Letting Focus

One of the findings of the Rugg Review into the private rented sector was that local authorities should be actively encouraged to explore ways in which to “improve their engagement with private landlords” in their area.
Hooray, say many landlords.
The fact is that local authorities need landlords to house people on Local Housing Allowance (Housing Benefit) and whilst some councils have a negative view of landlords, some other local authorities actually do a very good job of trying to think of innovative ways to get landlords on board in such a way that the landlords worries about tenant default are reduced.
But even in the better local authorities, all too often, the ways and means that the councils have devised are not really what landlords want.

Understanding the Needs of Landlords
At LettingFocus we think we understand the needs of landlords.
As a landlord for over 20 years and the author of the UK’s best selling book on property – which happens to be all about the subject of letting from a landlord point of view - I do claim to have an understanding of what landlords actually need.
And since the Rugg Review was published a growing number of local authorities have found me via the internet and asked to consult with them and benefit from my advice on how to set up Local Letting Agency Models and Choice Based Lettings schemes so they can better engage with landlords and meet their needs.
I do find public sector employment / consulting contracts and the rather long winded process of being hired as a consultant by a local authority rather daunting - but it is fun and it is nice to do something which is for landlords and the social housing sector and which will, I hope, be to the benefit of all.

Local Housing Allowance Payments and Default
Of course one of the problems for local authorities is that the present government decided that Housing Benefit would in future (unless the tenant was classed as vulnerable or other special circumstances were in place) be paid to the tenants rather than direct to the landlord.
(This was to encourage tenants’ financial responsibility, since you ask.)
Paul Shamplina of Landlord Action at our seminar last night said that this move has led to a huge increase in his workload of evicting non paying tenants because all too often tenants spent the money on other things rather than hold it and pay the rent due to the landlord.
As a result, a large number of landlords have completely stopped letting to people on Housing Benefits.
The Conservatives have said they will, if elected; once more offer the option of having Housing Benefit paid direct to the landlord.

Housing Benefit Bill Growing
All the while, the bill for Housing Benefit is growing and lots of landlords are still be prepared to let to people on benefits, despite the higher default risk.
(They know that good Housing Benefit tenants tend to stay a long time and often make model tenants. The hard bit is finding such good tenants.)
With the continued growth of people on Housing Benefits, it is imperative that local authorities do all they can to make letting to people on benefits attractive to landlords.
Through my consultancy with RSLs and local authorities I can help them with this objective.

ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlords’ expert and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased seminars for buy to let investors and landlords as well as one to one advice covering all aspects of being a landlord and investing in property.
I am able to give unbiased independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
I also do a lot of corporate consulting work in the private rented sector with banks, property websites and local authorities and RSLs - helping with their buy to let and landlord facing products and services.

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Related Article:
http://www.lettingfocus.com/pages/myarticles_Local_Housing_Allowance.html

Also, have you seen this article on Choosing a Letting Agency?
http://www.lettingfocus.com/pages/myarticles_ChoosingaLettingAgency.html

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