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Speaker's Corner: Damon Thomas of Social Homes

publication date: Nov 28, 2009
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Recent proposals from the Tories come at a time when social housing waiting lists are at their highest, the housing market is suffering and there is a glut of private rented sector accommodation. At the national conference for homeless charity Crisis, Shadow Housing Minister Grant Shapps said a complete overhaul of housing benefits is required, suggesting that automatic direct payments of housing benefits to private tenants should be stopped. The Conservatives want to give tenants the ability to choose whether to have benefits paid directly to the landlord or maintain the responsibility to pay their rent themselves. Their proposals will apparently increase the amount of affordable homes available, but what does this mean for those in the property industry? Will it make a difference and should landlords that have previously refused such claimants reconsider their position under these plans?

Shapps’ speech gave real recognition to the role that the private rented sector and letting agents can play in helping some of the country’s most vulnerable households. For too long the debate around housing vulnerable families has focused on house building announcements aimed at generating maximum media coverage. But the reality is that any future government will not be able to afford the vast amount of public expenditure necessary to build enough social housing to effectively tackle social housing waiting lists. If we look at the Government’s ‘Building Britain’s Future’ programme, they placed a £1.5 billion affordable housing building scheme at the heart of it. However, it is estimated that this will only build 20,000 homes. This doesn’t go anywhere near far enough to address the 1.8 million households currently on waiting lists across the country. If Government (whatever its political hue) is serious about reducing waiting lists, then it needs to look beyond such announcements to see what role the private rented sector and letting agents can play. That said, this is an area that the Government doesn’t seem to have sufficiently explored. Looking at ways to place households into private sector accommodation through letting agents has the potential to have a real impact on waiting lists as well as providing landlords with a somewhat untapped source of tenants

Traditionally, there have been a number of barriers, not least private landlords’ reluctance to engage with social housing candidates. In fact, research from the National Landlord’s Association has suggested some 52 per cent of private landlords refuse to rent to social tenants. Many hold the false assumption that social tenants will have an inability to meet rent payments. Another common perception is that local authorities may, for any number of reasons, suspend or cease benefits payments to social tenants – a perception that provides no assurance to landlords that rent payments will be made. Social Homes has researched these perceptions and barriers and now provides a feasible and very workable solution to the problems. The Fast Track scheme assesses prospective tenants’ LHA allowance and issues them with an Agreement in Principle, guaranteeing private landlords that the tenant will have the available funds to meet rent payments. In a difficult market, Fast Track delivers a readymade and substantial source of new, credit worthy tenants to private landlords. The scheme gives assurances on the suitability of potential tenants and provides the guarantee that rent payments will be made in full, providing the financial security that the sector requires.

In addition, these schemes provide letting agents with a new market opportunity within this area to enhance existing business. These developments mark a clear break away from traditional state-led, resource intensive house building programmes whilst providing an alternative source of revenue for private landlords. If the Government is at all serious, they need to earnestly engage with commercial companies. This model could revolutionise the way in which Government helps the country’s most vulnerable households, whilst bringing massive benefits for private landlords and letting agents. With such possibilities on offer, the question is how long will Government, this one or the next, take to address them?