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Ben Reeve-Lewis’ Newsround #12

Ben on a chair[Ben Reeve Lewis to his surprise, finds a few good things in the Localism Bill  ... ]

I’m looking into my crystal ball this week.

Despite being called ‘Landlord Law Blog’ I know that Tessa’s readers aren’t just landlords. It is read by tenants, lawyers, housing advisers, estate agents, homeless teams and a whole host of others.

So I am going to stretch my readers a bit this week by dragging most of you into unfamiliar territory….Homelessness, and a prediction or two.

How homelessness will affect YOU

Don’t hit the delete button just yet, I mean where homelessness is going to sit in the great scheme of things for landlords, tenants, lawyers and everyone else in the very near future.

It will affect everyone in the housing community, in both good and bad ways, depending on your viewpoint or vested interests.

What prompted this was a press release that came my way from the government’s communities website on Wednesday.

Changes they are a commin’

It’s a heads up for homelessness units around the country to get used to the new changes that are going to be ushered in with the Localism bill, that last week had it’s second reading and whose introduction is immanent.

It’s no secret, it has been widely reported but what slightly amazes me is the way homelessness units I know don’t seem to be preparing for it.

How it works

Brian BlessedA short lesson. A person goes to a homelessness unit for assistance. Commonly they think they are going to get a council house…..If I could laugh like Brian Blessed at this point I would.

The homelessness unit investigate their case and if all is well they are owed a housing duty. Nowadays the council will offer to set them up with a private landlord because all the council houses have been sold off on the right to buy. But, if the person turns it down they can hang on for social housing, which might mean sitting in temporary accommodation for a couple of years until one comes up. Its called a ‘Qualifying offer’.

What the Localism Bill is ushering in is the eradication of the qualifying offer. So the new scenario will be, person goes homeless, council offer a private rental, person turns it down, council say duty discharged, your own your own.

A logical step?

Now as I mentioned above, depending on your perspective or vested interests you may think this is either long overdue or a living outrage.

For my part it just seems a logical solution for councils who don’t have properties anyway.

There is another way ...
Another way ... ?

What does this mean to you?

Well it means that council’s are going to need more private rentals in order to be able to discharge their statutory duties. They will also have to do something that is for most of them a completely alien activity, building relationships and doing deals with the private sector.

To be fair some ground breaking authorities have already picked up the baton on that.

Landlords will have a ready market of tenants and may find it better to go to them rather than through accommodation agents, who in many areas don’t have the best reputations…..particularly my area.

Lets R Us – coming to a Council near you …

I know some people in homelessness units who have already clocked this and are looking to start their own agencies through which they can work to improve property conditions and security by having a comprehensive in-house approach.

Lets face it, what high street agent can boast a team of environmental health officers, housing advisers, grants teams, tenant finding service and hot line to housing benefit? Maybe this is the way forward. If the government continues to refuse to regulate agents council’s could step in.

If you shout loudly enough they’ll understand …

In areas where the council don’t go down this road, local agents will be able to provide a service. However, Public sector and private sector need to learn each other’s language.

Any agent thinking this might be a good idea to get in on needs to be mindful of the idea that councils are traditionally very risk averse organisations, they ‘re not natural entrepreneurs.

Orchard Shipman have already twigged to this and are making inroads as agent of choice for many councils, because they understand the needs of the culture.

Better for tenants?

Tenants? The response to the new laws may just help improve conditions if council’s insist on specific safeguards, which they will do (remember they are risk averse) because under the new law they must ensure that a property they are offering is suitable. For instance electricity safety certificates aren’t mandatory but most council procurement schemes that I know insist on them.

Also the Localism bill will require properties to be let for a minimum of 12 months, so hopefully tenants will have to move less and communities can build.

Much as it galls me to admit it, this particular part of the Localism Bill and the possible reactions to it, which are being discussed in councils up and down the land might just improve things in the private rental sector if council’s get their acts together.

Losers and lawyers

The losers will be homelessness applicants who go through the system expecting council housing but that hardly happens anyway, so what are they really losing apart from unrealistic expectations?.

And what about the lawyers? What do they get out of it? At the moment they can earn money challenging the council’s decisions but when legal aid cuts come in that will go.

Where will the affordable properties come from?

But I have a major concern. If rents remain high, and they show no signs of dropping, and housing benefit is taking a dive, how are these offers of accommodation going to be affordable for the tenants?

If they aren’t affordable they wont be reasonable so cant be offered. The glitch in the system perhaps. [Bear in mind also that affordable probably isn't really affordable anyway - Ed]

Housing benefit changes to be challenged in court

But that might get fixed too. Some of you may have heard that the Child Poverty action Group is taking the government to court to challenge the lawfulness of certain changes to Housing Benefit

If they are successful they might have to climb down.

If they don’t then I am concerned by the National Landlord’s Association survey this week that shows 58% of landlords moving away from housing benefit tenants because of restrictions.

That’s the problem with the present system. None of it quite fits together.

Brian Blessed picture by ssoosay, Homeless Bill from jsweiringa

 

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Important note. If you are reading an old post, remember that the law may have changed since it was written.




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10 Responses to Ben Reeve-Lewis’ Newsround #12

  1. Hi Ben,

    Great blog and I’d just like to add my own ten penneth. We have homeless tenants in my block but whether housed under Private Sector Leasing or on a nightly rate, the council relies on the agent securing the properties to get all the required information. This will include whether the landlord of said property has permission to sublet, both from the freeholder and the mortgage company. As the council relies on the agent to secure these details, and we are left out of the loop, then currently none of our flats should be on the council’s books.

    I didn’t actually know about the ‘Qualifying offer’ and this goes some way to explaining why some tenants have gone in a matter of days whilst some have remained in situ for months even though they have been on a nightly rate.

    Personally, whilst I think its scandalous that homelessness is rearing its head to such a degree in the 21st century I have to raise my concerns that councils using our block fail time and time again to liaise with the freehold owners and our managing agent.

    Leaving us out of the loop is fraught with problems, particularly when we often don’t even know which council has placed a tenant in situ, (under reciprocal housing arrangements).

    And when an anti-social tenant is placed, then it becomes an absolute nightmare, although thankfully slightly easier to deal with as the nightly occupants are on a licence, rather than an AST (and that’s an even worse scenario!)

    Here, the leaseholder landlord gets £35 per night and so it doesn’t take a genius to work out how much that will cost the council over a year.

    If the private sector is being called upon to house the homeless then surely expecting landlords to tighten their belts and suck up the reduction in LHA in the most affluent areas would be a good starting point. After all they are service providers!

    If they don’t then hard pressed boroughs such as mine will be faced with needing to obtain more private housing and with rogue landlords being prevalent in the lower end of the market, these tenants, (if the Qualifying offer is withdrawn) will be forced into the arms of the very landlords that no one is doing anything about!

    Not to mention the strain on block management, if my experience is anything to go by!

    Kind Regards

    Sharon

  2. Nice reply Sharon, and it really highlights something that I mentioned in the blog, the fact that the private and public sector are a long way from understanding each other.

    This may sound absolutley ridiculous, but I can assure you it is true. I recently attended a meeting with a bunch of other concerned people about how best to forge links with private landlords. we decided on a meeting, like when the aliens walk out of the ship at the end of Close Encounters haha.

    We wondered where the best place would be to have it. Someone suggested the Town Hall. big building, loads of meeting rooms, but as one committee member ruefully pointed out, we had done that before and the council werent happy about letting landlords onto council premnises LOL.

    What on earth did they think they were going to do? Start swinging from the chandeliers?, opening crack houses?

    The gap of understanding really is that bad. Not among individual officers, but somehwere in the nefarious notion of ‘THE COUNCIL’, whatever that actually means.

    Policies are one thing, changing the entrenched culture is quite another. Believe it or not I actally believe it will happen because everyday I meet loads of committed, proactive people who have woken up and smelled the coffee and know what is going on out there.

    On thing you get wrong though Sharon, and this is merely a gap in understanding, is the council’s abilities to suck up the difference in LHA rates. the council has absolutely no control over this, it is carrying out government rules, which is all it can do.

    Everyone I know who works in local authorites, both as a colleague and trainer of them, thinks that LHA payments (HB Direct to tenants) was the daftest idea any government ever had. They see the impending housing benefit cuts v. rising rents, and the effects of taking away the qualifying offer as a slow motion car crash, but as publice servants they are powerless to resist.

    I sincerely believe that the bubble is about to burst, in a way that will affect tenants and landlords both.

  3. Hi Ben,

    Sorry my meaning wasn’t clear. It’s the private landlords I feel need to ‘suck up’ the reduction in LHA. The general consensus appears that they can’t afford to reduce their rents to compensate which is contributing to the problem.

    Whilst this may undoubtedly be true for some, as we can’t actually see what profits they make, no one can effectively argue whether this is a serious factor or not.

    Kind Regards

    Sharon

  4. Hi Sharon

    I suspect that most landlords will say “Why should we reduce our rents to help out the government?”

    Particuarly as HB tenants are often perceived as ‘difficult’ not least because of the problems with payment getting to the landlords.

    For example if it is paid direct to the tenants they risk the tenants spending it on other things, if it is paid direct to the landlord, they risk Local Authorities ‘clawing’ it back, for example if the tenant is found not to be entitled to it.

    While there is a general shortage of rented accommodation and lots of nice non HB tenants clamouring for properties, it is *most* unlikely that landlords are going to fall in with what the government want and drop their rents.

  5. I read a report today that put rent arrears @ £277 million. It cant all be with HB tenants. Many people who work still dont prioritise their debts.

    The aim of direct LHA payments under the labour government was to empower people to take charge of their finances. Fine for most but I see a lot of tenants with drink, drug and gambling problems who suddenly find another £800 in their bank account that wasnt there before, and they often say to me they hate it too, preferring to have the temptation taken out of their hands. If the aim was empowerment, what was wrong with the old system that empwered people with choice about how their HB got paid?

    On a different tip, and a hidden one at that, some London boroughs with very high rents beyond the cap are looking to ‘Re-settle’ tenants in poorer boroughs like mine. There is a lot of politicking going on at the moment in local government about this. The expensive boroughs get their problems sorted while the poorer borough’s HB bills go up.

    It really is a strange time

  6. Hi Tessa,
    Hope you are well :)

    You’ve hit the nail fairly and squarely on the head when you note that HB tenants can often be perceived as ‘difficult’. I have a great deal of sympathy for the good landlords out there who, because they don’t get paid directly, don’t want to take a drop in rent to accommodate renting tenants who see paying their rent being a long way down the priorities list.

    However a refusal to house benefit tenants in the more affluent boroughs puts a terrible strain in the poorer boroughs where rogue landlords are rife.

    In my (private) block, all the trouble we experience is with sub-tenants on benefits.

    I have to wonder why the NLA have been unsuccessful in getting benefit paid directly to them?

    If they did get it paid direct, perhaps they would accept the ‘additional management’ that often comes with benefit tenants as at least they would be getting paid!

    Unfortunately I live one of the poorer boroughs where rogue landlords are rife and its our block management that has to deal with both the landlord and the sub-tenant.

    Why should landlords help the Government?

    It’s leasehold management that needs the help!!

    Kind Regards

    Sharon

    Where’s our incentive?

  7. Renting to the homeless is a risk not many landlords are wiiling to take

    I work in partnership with others and we let out a house on a room basis to homeless people. We have an arrangement with a local homeless charity that they point people in our direction that have the will and commitment to live with others and make sure they keep a roof over their heads.

    People are homeless for many reasons but not being able to deal with the authorities (being scared of them). Not being able to read forms or complete them causes tremendous problems.

    Despite getting the rent paid direct it stops immediately if they miss an appointment or circumstances change. We are notified out about the stop in payment generally three weeks after it was stopped and only a week before the next payment is due.

    We find ourselves chasing that the tenants have received the forms, that they understand them and that they do actually get them returned. The forms are onerous and not always self explanatory. We help where we can and then advise the tenants to go to the council office and sit and wait to see someone to get them completed properly

    Homeless people do not pass reference tests, once in an agreement you have to go through all normal procedures to evict if they don’t pay. So getting tenants recommended at least cuts down the chances of bad tenants.

    The charity we work with is having to shut down due to lack of funding so our source of ‘vetted’ tenants will dry up. Our only resort them will be to go back to the market of renting to those that can pass references or give guarantors.

  8. Sandra I think many of my unit’s sympathetic landlords could do with understanding that once they have taken a tenant on the council steps back and there is no difference in relationship to a tenant found through a letting agent. Thanks for pointing that out. I think that should change, I think the council should be more hands on with the people they refer if we are to build a mutually supportive working relationship.

    In addition I would also like to point up the leaked letter from Eric Pickles’s office
    showing that the government knew all along that housing benefit cuts would create at least 20,000 new homelessness applications. As you say Sharon, people become homeless for many reasons and there are about to be thousands more, people like us, being thrown into the pot




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About the post author:

Tessa Shepperson

Tessa is a lawyer specialising in residential landlord and tenant law. She runs the Landlord Law website (now in its 12th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google



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