Councils turn to private landlords to solve homeless problem

Local authorities are increasingly turning to the private sector to tackle homelessness and house their social tenants because council housing waiting lists are escalating and social housing stock is stymied. The government is planning to allow councils to discharge themselves of their homelessness duty if they can offer alternative suitable private sector accommodation. A consultation on the reform of social housing, which ends on January 17, and the localism bill seeks views on the proposal that councils need no longer seek homeless people's agreement to place them in private accommodation so long as the tenancy is for at least 12 months. The council should also secure housing for them again if they become unintentionally homeless within two years. Brighton & Hove One city council that is advanced in its use of the private sector is Brighton & Hove. Sylvia Peckham, its head of temporary accommodation and allocations, says the council has "been able to work with people at risk of homelessness at an earlier stage to prevent them becoming homeless by finding alternative accommodation with private landlords". It makes sense for the council to nurture private landlords. Brighton's large commuter and student population plus high house prices have ensured a disproportionate amount of private sector stock: one in five homes is privately rented. Its social housing forms only 6% of total housing stock in the city. Coupled with this, its swelling register has more than 11,000 people out of a population of 250,000 on the waiting list for homes and a traditionally high level of homelessness. "We changed to prevention and finding other options for people so they don't have to go through homelessness," says Peckham. The council used to accept a duty towards 1,000 homeless applications per year, but accepts just over 300 since it brought in its homelessness strategy four years ago. It works with around 700 private landlords and letting agents to house social tenants. "We've been successful because we've worked with the private sector by either sustaining the accommodation they're in – working with landlords and sorting out issues – or, if we can't, finding them another home in the private sector so that they don't become homeless." Private landlords One of its key planks is the Landlord Accreditation Scheme, launched last year, which has 100 certified private landlords registered so far. It aims to improve the private sector's accommodation and management standards and weed out the unscrupulous. Landlords can sign up to the scheme's basic two-day training programme for briefings on relevant legislation and how to manage a tenancy. This includes issuing notices, understanding housing benefit changes, health and safety, and legal requirements – for instance, carrying out regular gas checks. The quality of accommodation is also monitored. Landlords are directed towards improvement grants, for instance, energy efficiency grants to instal insulation or central heating. Agencies and consultants have been quick to mine this lucrative strand of the new government agenda. Private sector leasing specialist Orchard & Shipman has just signed a contract with Brighton & Hove to instal social housing tenants in their properties. Rents are set at 90% of local housing allowance plus a fee. John Taylor, Orchard's chief executive, says local authorities face growing demand for social housing with a decreasing supply of housing stock. "The ability to take on additional housing stock through contracts with private landlords and match people to homes not only ensures quality homes for those people homeless or at risk of homelessness, but also provides some movement within an otherwise stagnant market," he says. The Residential Management Group has also started offering private sector housing and tenancy training to councils and landlords. Martin Wierzbicki, its head of consultancy, says the private rented market is "saturated with first-time buyers unable to move out because of mortgage difficulties and rents rising. However, there are many different local private rented markets across the UK … It's a very fragmented market. Some councils understand and are close to their existing landlords; others are not." Overcrowding is one different strand of the market where private sector opportunities exist. "The council stock in Brighton has very few four-bed properties and above," says Peckham. While around 1000 properties become available each year, half of these are one-bedroom flats. "The private sector has larger properties," she says, "so we've been leasing them – to order almost – to match them with those households in overcrowded council accommodation who are going to be waiting an awfully long time and suffering stresses because of all the overcrowding issues." Difficulties ahead However, once tenants move into a leased property, they lose their security of tenure. Rents are also higher. Where a council family house would be around £80 a week to rent in Brighton, private leased properties cost around £200. But Peckham maintains there are still advantages for the homeless family: "If they're not working, the rent is covered by housing benefit," she says. "And because we've leased the properties for up to 10 years, we're not going to throw them out. While legally they don't have any security, morally we've agreed that this is an avenue to relieve their overcrowding fairly quickly and they can stay there for the duration of the lease." Yet there are difficulties ahead. Peckham anticipates that homelessness demand will increase because of cuts to private-sector housing benefit allowances from April 2011. Housing charities also fear the cuts will increase homelessness as tenants struggle to pay the shortfall. Duncan Shrubsole, director of policy and external affairs at Crisis, a homelessness charity, says he is, "very concerned that cuts will reduce the level of benefit available to pay the rent and the number of landlords and properties that are available". And, he adds, "we are concerned to ensure that the government does not make changes that would result in particularly vulnerable people being placed into the private rented sector against their will and when it is not suitable for them, and that they always get the support they need". In anticipation, Brighton & Hove council has started negotiating with private landlords to reduce rents if tenants are struggling. The idea is to prevent a return to homelessness, the sweetener being that a reliable tenant paying regular rent is better than lost rent after eviction. "We've been saying, 'Look, if you've got a good tenant who's going to pay the rent, then it might be easier to take a hit on the rent and you've got no void period'" says Peckham. "We've got quite good relationships [with the landlords] and we've started building up that element of trust. There's still a way to go, but landlords are starting to work with us a lot more than five to 10 years ago," she says. 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