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The private rented sector can be 'life-changing' for homeless people

3 min read

Government should fund new cost-effective programs to create a private rented sector that provides stability for homeless people argues Richard Benyon MP.


The private rented sector is an increasingly important route out of homelessness. When renting works for homeless people it can be life changing - it’s often a huge step towards finding a job, reconnecting with family and rebuilding lives.

Yet finding a home in the PRS can be difficult and we all know, despite the welcome move from the Government to ban letting agent fees, upfront costs often act as a barrier for many people.

Research shows when renting to homeless people, 16% of landlords reported increasing the deposit, 12% increased the rent required in advance, and 15% increased the contractual rent. 55% of landlords say they are unwilling to let to tenants in receipt of housing benefit and the number unwilling to rent to homeless people is even higher at 82%.

However, I believe there are ways to make the PRS work for this group and there are innovative solutions now being delivered by which homeless and vulnerable people are being helped and guided into the market and most importantly, being given the tools and support needed to sustain lengthy tenancies.

From 2010 to 2014, with funding from the DCLG, the homeless charity Crisis ran the ‘Private Rented Sector Access Programme’. This funded specific Help to Rent schemes across the country which enabled homeless and vulnerable people access affordable and secure accommodation in the PRS.

It matched tenants with landlords, providing financial guarantees for deposits and rent, with ongoing support for both parties, including help for the tenant in budgeting and in gaining and sustaining employment. During the programme, more than 8,000 tenancies were created with a 90% sustainment rate which is an incredible achievement for this cohort.

As well as calling for funding for these Help to Rent schemes, Crisis is also proposing a Government funded National Rent Deposit Guarantee Scheme. This would provide Help to Rent projects with greater financial security, with landlords safe in the knowledge their property is protected and that the help-to-rent projects are providing the right support to help tenants maintain rent. There is already a national mortgage guarantee which helps struggling first-time buyers with the cost of a deposit and this would be a similar scheme for those who are just about managing and for whom purchasing a home is just not realistic. 

Both the Residential Landlords Association and the National Landlords Association believe that with the right support in place, financial risks can be reduced and letting to this cohort can be a viable business model. We can and should be actively encouraging landlords to work with these schemes.

The rationale to Government is that these policies are cost-effective and will provide stability in the private rented sector for the most vulnerable, helping to prevent and tackle homelessness. Independent analysis commissioned by Crisis estimates that if access were available to all households approaching their local authority for homelessness assistance, some 32,000 people could receive support annually. Assuming that if 60% of people leave temporary accommodation as a result of the scheme being available, savings from one year of the scheme would amount to between £175-595 million. Investing in PRS access support fits with Government’s wider agenda on Universal Credit and homelessness prevention and would build on the recent announcement for Homelessness Prevention Trailblazers and the PM’s welcome commitment to put prevention at the heart of a new approach. 

By changing perceptions, we can make a private rented sector that works for all.

 

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