Another interesting post by our regular guest blogger, Ben Reeve-Lewis.
Margaret Thatcher and the right to buy
Some of you may be able to remember when Margaret Thatcher’s government introduced the right to buy scheme back in the 1980s, a mandatory scheme forcing social landlords to sell properties to their tenants at a massive discount.
It turned the whole country into a nation of homeowners and in the process completely changed the demographic of the UK’s housing market. I can’t say for sure if the UK is the only country in Europe to be obsessed with home-ownership but if we aren’t way out front we have to be in the top flight.
I just got back from a short trip to stay with friends in Marbella and was shocked at the rent levels in Spain where renting is far more common than here. They were renting out a 3 bed house with shared swimming pool and tennis court, right down in the heart of the millionaire’s Costa Del Sol for 375 Euros a month. That’s around £330. Why would you bother to buy?
Now the right to buy was a fantastic opportunity for thousands of families. I knew plenty of active socialists at the time who campaigned against it, sold papers and wore badges but still made sure they bought theirs so as not to be left out.
The problems for social housing started then because everyone who could afford it snapped up their properties and social housing stock numbers dwindled proportionally. Easy solution you quickly reply…..use the money the council’s made from selling to build more social housing. The problem is, the right to buy scheme came with a massive caveat, council’s weren’t allowed to use the money they made to build new properties.
Result….hardly any council housing left, but still a statutory duty on local councils to supply housing. For instance my local authority have 1,400 homes available and 17,000 people on the waiting list, – am still astonished at how durable the myth is that if you grow up in an area you will one day get a council house there.
So how do councils fulfill their housing duties now? That solution is easy. Council’s look to private landlords to provide accommodation that they can’t provide themselves. The market is huge and councils struggle to find enough properties. It isn’t that the properties aren’t out there. If you are a small landlord going it alone and not using an agent, you might find searching for tenants a permanent stress. The council has the tenants and needs the properties.
When a person approaches the homelessness unit they can go through 2 routes:-
I won’t bore you with the details (and believe me, they truly are boring) but the council has to apply 5 tests to any homeless applicant. If they pass all 5 tests then a statutory duty arises and the council has to find accommodation for them. This is why they need your properties because without them they cant fulfil their duties and will be breaking the law.
The other route is where an applicant applies as homeless and the council can avoid the assessment route and prevent homelessness without having to go through the 5 tests and simply put a would be tenant and a landlord together, result? Homelessness prevented.
So again they need your properties.
Who takes on these properties?
Most councils have a person or a team usually called ‘Procurement’, their job is to find suitable properties to refer tenants to.
Every local authority will run slightly different schemes based on the needs of their area and the housing strategy of the council itself.
For many years now Private Sector Leasing Schemes (PSLs) have been quite popular in some areas. Commonly the council take you property off of your hands for a fixed period such as 3 or 5 years. They use it to house their tenants, paying slightly less than market rent levels. They take care of everything. If the tenant doesn’t pay the rent, you still get paid and the arrears are the council’s problem.
If the tenant ends up smashing the place to pieces the council repair it and it is not your concern. You get to sit on the property and let the equity accrue over time without the normal headaches of letting management.
Some councils will pay deposits and rent in advance for tenants they place with a landlord, some incentivise in different ways by offering bond schemes or housing benefit in advance.
Many councils have specific projects, such as finding accommodation for ex offenders or refugees. Some may be looking for landlords willing to take on tenants with learning difficulties or low level mental health issues and will often provide external support for what is termed ‘Tenancy Sustainment’.
Sedgemoor council in Somerset works with the local YMCA and trains young people who live in temporary accommodation to manage their finances and the art of being a decent responsible tenant. They get banded into bronze, silver and gold and when at gold level they introduce them to local landlords who have some assurance that letting to young people isn’t going to lead to disaster.
There are so many schemes out there and all you have to do to find out is ring your local housing department and ask to speak to anyone who takes on properties from private landlords. They will bite your hand off.
Speaking to procurement officers I know in London (yeah sorry to be so London-centric but it is where I live) they tell me that they tend to have more 3 and 4 bedroom properties than they need and are short of 1 and 2 bed.
Don’t expect every scheme to provide depth of support though. Many of them will simply act like a letting agent. put you together with a prospective tenant and leave you to get on with it. Unlike an agent however you wont have to pay any fees for it.
So if you have property to let, are tired of finding tenants yourself, don’t want to risk using what might turn out to be a dodgy agent or just have a well developed social conscience, then you could do worse than think of renting through the council.
About Ben Reeve-Lewis: Ben was the Tenancy Relations Officer for Lewisham Council for 11 years, prosecuting landlords for harassment and illegal eviction. Now he is a freelance housing law training consultant with a more balanced approach, delivering housing law courses for the Chartered Institute Of Housing, Shelter etc. His aim now is to help the housing world work as a interdependent system that benefits all