Cllr Paul Mercer is a councillor on Charnwood Borough Council and is the Lead Member for Housing in the Cabinet. He is writing in a personal capacity.
The Homelessness Reduction Act which came into force in April 2018 was always going to be a challenge. Charnwood Borough Council put a lot of effort into ensuring that housing officers were ready. As lead member for housing, I attended briefings, accompanied officers on a training session, and ensured that other Cabinet members were aware of its implications.
The Act has resulted in a significant increase in the number of cases of homelessness which councils have had to deal with and has put significant pressure on both officers and finances.
In the first year of the Act, Charnwood dealt with 609 cases, of which a third had formerly been in private rented accommodation. Almost half were a consequence of relationships breaking down; less than one per cent were because of mortgage repossession; 58 per cent had no children; and 27 per cent were single parents.
We have always been conscious that many private sector landlords and letting agents are reluctant to accept tenants who are on low incomes or claim benefits. With housing stock levels declining, and funding more difficult to find, it has become more difficult for the homeless to access the private rented sector.
With this in mind, we launched ‘CBC Lettings’ at the Private Landlords Forum in April 2019. This is a social lettings service designed to make renting out a property easier in the private rented sector. It was set up to provide landlords with a range of different options to let out their property, whilst working to improve the standards of accommodation within the sector; and to improve access to the sector for homeless and vulnerably-housed households.
In May 2019, a successful bid was made to the Rapid Rehousing Pathway fund. The bid was to expand the CBC Lettings Service across Leicestershire. The successful bid has meant the creation of two new posts, a CBC Lettings Officer and a CBC Lettings Liaison Officer. These posts provide a professional and comprehensive service to customers and offer intensive support at the beginning of the tenancy and at points of crisis.
CBC Lettings does not charge any set up fees for the management of a property. It does charge a monthly management fee which covers the costs of running the service. In order to encourage landlords to become involved, we have held a series of well-attended landlord forums with presentations on relevant issues, but with the objective of promoting this service.
These events, coupled with the promotion of CBC Lettings, have gone some way towards encouraging landlords to look more favourably on low income and benefit-claiming tenants. However, it has not gone far enough. Therefore we are looking at other ways in which landlords can be encouraged to engage.
The cost of putting individuals and families into temporary accommodation is significant and it is likely that there are many long-term and unquantifiable knock-on effects. Finding secure accommodation is therefore not only preferable but is likely to lead to other savings as well. For many councils, including Charnwood, building new social housing is not practical because of the lack of availability of suitable land. But the greatest hurdle is this reluctance of private sector landlords to accept these tenants.
Landlords are wary because of a concern that tenants could damage their properties and there would be no realistic way of being compensated. This apprehension is not entirely misplaced although, in my experience, it is only a small minority who cause significant damage. Many of these landlords have borrowed money to buy these properties and the Government has recently reduced the tax benefits of buy to let schemes. Therefore, one option might be to offer landlords who are prepared to let their properties to tenants who either need to be rehoused immediately or are on our priority waiting list an incentive – through being able to offset some of their interest against tax while the properties are being rented. The amount could be increased until it was clear that it was having a beneficial impact on the level of homelessness.
Councils already provide ‘partnership grants’ of up to £15,000 to help towards the cost of works to bring empty properties to a decent home standard in exchange for nomination rights. Once completed, the owner enters into an assured shorthold tenancy agreement with the tenant under the provisions of the Housing Act 1988 and the Council will provide a rent deposit bond to the owner to the value of four weeks rent. If the full amount is claimed, the Council has nomination rights for three years, and the property must be available for five years.
The idea would be to extend this concept and allow landlords to gain tax relief by offsetting their mortgage interest payments while they were renting to tenants who had been either in temporary accommodation or in a priority band on the housing register. This would go some way towards meeting the challenge that councils have to face as a consequence of the Homelessness Reduction Act.