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

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:

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