An interesting article in the January / February issue of Residential Property Investor looks at Fast Trak, a new company tackling the problems of too many social housing tenants, not enough social housing to put them in, and not enough private landlords willing to take a chance on them.
There are a myriad reasons why private landlords will not take social tenants. For example:
- Local housing allowance is paid direct to tenants, resulting in many tenants not passing the money on and building up serious rent arrears
- 95% of Local Authorities wanting to get people housed do not provide references
- It is not possible to know how much LHA tenants will receive (or indeed whether they will get any benefit at all) until after they have signed up
- Most councils take weeks to process applications, eight weeks being the norm (meaning that the tenant will be two months in arrears before any money comes in)
- Rent is then paid in arrears rather than (as is normal in the private sector) in advance, and then (to make matters worse) is paid every four weeks rather than every month
If the government had sat down and tried to set up an system which was going to put private landlords off taking social tenants, they could not have done much better!
Also , many landlords and agents believe that anyone on benefit is likely to be a poor tenant, although this is actually most unfair – many (perhaps the majority) of social tenants are responsible people looking for a long term tenancy in a property they are willing to look after well.
Fast Trak director Damon Thomas, was undeterred by all these problems. In his view the twin facts of empty private sector houses in need of tenants, and social tenants in need of housing, was a problem in search of a solution. He would be the one to provide that solution.
The solution he has come up with is as follows:
- Fast Trak will be a comprehensive assessment of a tenant. A poor credit history can be discounted if there are genuine reasons for it, for example if the tenant has fallen on hard times, he may be accepted. However ‘won’t pay’ tenants applications are taken no further.
- If the tenant is found to be acceptable, then Fast Trak will do the sums, calculating the likely LHA and assessing the tenants ability to pay any rent top up.
- The scheme then offers comprehensive insurance to landlords, guaranteeing them against non payment of rent, including delays in the calculation of benefit. Also if Fast Trak has miscalculated the LHA the insurance will make up the difference. The insurance will also cover any damage done by the tenant.
- The only payment necessary is a single up front application fee of £450, which in many cases will be paid by the Local Authority.
- Once the tenant has been accepted, he will be referred to one of the network of letting agents which will find the tenant the property.
The scheme is in its early days, but it appears to be supported by some 16 Local Authorities and has a network of 100 agents, hopefully soon to be more.
The Fast Trak solution sounds like an excellent one, and if it works and is accepted by local authorities and agents, could do really well. I wish it all the best
For more information see the website www.fasttrak.co.uk or telephone 03332 403332.
Have you had any experience of this scheme? If you are a landlord, would you be willing to take on a social tenant, if the Fast Trak insurance was provided? Do you think a scheme like this could help solve Local Authorities problems in finding housing for their social tenants? Please leave a comment.