The widespread practise of councils paying private landlords to housing tenants makes it difficult for councils housing tenants in a market were landlords hold balance of power, says housing charities.
Shortage of social housing means that councils are offering landlords cash payments of up to £4,000 to accommodate homeless families, reports the Guardian.
Councils in the south-east of England and London are now advertising cash incentives to private landlords to get them to agree to let council-vetted tenants for two years.
In Haringey in north London and the nearby borough of Barnet , private sector landlords are being offered one-off payments of up to £3,000 if they sign up to a two-year tenancy.
The housing charity Shelter said the offer of cash payments showed that the balance of power had switched between councils and landlords. “Landlords don’t need local authorities, but local authorities need them,” said Zorana Halpin, a policy officer at Shelter.
“Local authorities used to procure large volumes of temporary accommodation from private landlords through leases – the rents they could pay were in line with market rates and it meant no void periods for landlords, so councils had a bit of negotiating power and the deal was attractive to landlords. The fact that councils are prioritising their spending to make sure people are being housed is a good thing, but we are concerned that they have limited resources and are having to use some of them to pay these incentives. Ultimately, the only long-term solution is to build more affordable homes.”
David Lawrenson, a housing consultant has said: “There is supposed to be some kind of agreement to stop councils competing with each other, but these landlord incentives suggest that they are not working, as they still seem to be competing with each other to try to get that stock in. It’s only going to get worse as rents continue to rise.”
Melanie Rees, head of policy at the Chartered Institute of Housing (CIH), said councils had been given more freedom to help homeless people by finding them a home in the private rented sector. However, benefit cuts have reduced the rents paid to private landlords. “But welfare reform – in particular the benefit cap – has cut the amount of benefits that people receive and made private landlords in some areas more reluctant to let to claimants,” said Rees.
“In some areas, offering incentives to private landlords may well be cheaper than using temporary accommodation – and a better option for the tenant than being stuck in a poor quality B&B.”
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