Oft-cited statistics about the cause of homelessness seek to pin the blame on landlords.
With the possibility of new legislation to tackle homelessness being announced in this month’s Queen Speech, meaningful reforms need to be made that engage landlords rather than making them a scapegoat.
Where are we now?
Figures from the Department for Communities and Local Government show that 29 per cent of people accepted as homeless in England cite the main cause as the loss of an assured shorthold tenancy.
However, this headline percentage that gets trotted out at regular intervals to bemoan the ability of landlords to regain possession of their property for legitimate reasons is an oversimplification of a more complex situation.
In total numbers, the ending of a tenancy was the cause for homelessness for 15,420 people in 2014. In 2004, this number was 16,820. It reached a low of 4,580 in 2009 but has steadily been on the rise since. Plausibly, this is down to LHA rates not keeping up with market rents, among other factors.
In those ten years the number of households in the private rented sector (PRS) has more than doubled from under 2million in 2004 to over 4million in 2014. In that time, the number of owner-occupier households has slightly declined and those in the social housing sector have remained relatively stable.
The PRS has grown steadily and picked up the slack from the other housing sectors. The lack of new social housing stock has led to local authorities discharging their homelessness duties through use of private landlords, but the squeeze on housing benefits and the rise in rent arrears is leading to landlords becoming unwilling to take part in the process.
The NLA is supporting calls by Crisis, the Centre for Social Justice, and others for the Government to enact meaningful reforms in order to tackle homelessness.
Extend Council Duties
A report launched this week by the charity Crisis recommends:
- Extending the definition of threatened with homelessness from 28 days to 56 days
- Amending legislation so councils accept Section 21 notices as valid evidence that a person is threatened with homelessness
These changes would allow councils to respond to the threat of homelessness at a much earlier point, allowing for a greater chance of success in mediating with private landlords, assisting with rent arrears and debt management.
Importantly, forcing councils to accept a Section 21 notice as evidence of impending homelessness would stop the current practice of councils encouraging tenants to remain in the property until the bailiffs turn up to evict.
This advice leads to tenants accruing further rent arrears, making them more susceptible to becoming homeless while forcing landlords through a lengthy and costly court process that undermines their confidence in letting their property to vulnerable tenants.
The NLA has been pushing for Ministers to change this but despite a letter from the Housing Minister to all councils in England, the practice is still continuing. Legislative action is what is needed to fix this now, and we support Crisis in this call.
Confidence is Key
In order to utilise the PRS to tackle homelessness, landlords need confidence in the system. Being dragged through a lengthy and uncertain court battle to try and regain possession of a property, or receive rent owed, undermines this confidence.
We’ve previously talked about access schemes that alleviate some of the risks that landlords face in renting to vulnerable households, but there are other changes that can be made to off-set risks and increase confidence.
Last week, the Resolution Foundation published a report on Universal Credit. The role out of UC across the country is having disastrous effects for landlords in terms of rent arrears. Despite continued pressure, the Government is still reluctant to extend the sharing of information with landlords and ease the transition to direct payment.
The report agrees with the NLA that this current process is not sensible, and change is desperately needed to cut down on rent arrears face by many landlords.
That being said, as long as UC rates continue to restrict access to just the very bottom of the market , and fail to at least reflect market rents, only a minority of landlords will be willing or able to engage with vulnerable groups.
The Centre for Social Justice recently published a report on the housing sector in the UK. One of the main recommendations, which the NLA supports, is the wholesale reform of Section 8.
We want the process to be made fairer and more efficient, starting the extension of online application. As the CSJ report recommends, it should be brought into line with the Section 21 process so that where there is a clear breach of contract on the part of the tenant, for which the landlord can provide documentary evidence, a decision can be made without the landlord being dragged through a long and costly court case.
Such a change would not only lower the risk for landlords letting to previously homeless people, or those in receipt of benefits, but would also provide landlords with the confidence to offer longer tenancies (where possible).
Reforms are needed in the PRS to improve it – but in order to ensure that tenants receive a better service; these reforms should engage landlords and not unnecessarily punish them.