The Private Rented Team Leader introduced the report and said that it was potentially relevant to everyone because anyone could lose their job or become ill and require Housing Benefit.  Local Housing Allowance (LHA) rates that are paid to Housing Benefit recipients are based on an area within a 30 minute commute of the City, not on market rent levels within the City itself. 

The Panel questioned whether the 3% of landlords who accept Housing Benefit tenants included landlords of houses in multiple occupations (HMOs).  The Private Rented Team Leader said that they did not.  The Council did not use HMOs for statutory homelessness and had no powers to require landlords to accept housing benefit tenants.  Landlords tended to perceive that people in receipt of Housing Benefit as high risk tenants and often faced paying a 30% insurance premium and higher mortgage interest rates when letting properties to them.  The 3% ranged from ethical landlords to those who were maybe looking to take advantage of people but in his experience, most landlords were good.

The Panel noted that half of statutory homelessness cases resulted from private rented sector (PRS) evictions and asked about the typical reasons for PRS evictions.  The Private Rented Team Leader advised that approximately one quarter of PRS evictions were due to a breach of tenancy (e.g. non-payment of rent).  The remainder tended to be due to a change in the landlord’s circumstances, e.g. resulting in a decision to sell the property, or in some cases, seeking higher rents from tenants in work.  However, there was no duty on landlords to provide a reason so the picture was difficult to analyse.

The Panel noted the difficulty people on Housing Benefit in particular faced in providing three months rent in advance and heard that some landlords even required 12 months rent in advance. 

The Panel welcomed the Council’s new Rent Guarantee Scheme as an excellent initiative and asked for initial feedback.  The Private Rented Team Leader likened the scheme to a small snowball that was rolling.  There had been 8 lets to date and the scheme had just received national publicity, which had resulted in four phone calls from other local authorities in one day.  The scheme was consistent with the government’s Homelessness Reduction bill which was focused on providing help at an earlier stage.  He was confident that it was a good model that was working but there was a financial risk to the Council in guaranteeing rents.  Tenants were selected from a prevention list and those in temporary accommodation.  There were some difficult cases and it may be that some people fall out of the scheme but the Council had not had to pay out yet.

The Head of Housing added that the scheme was aligned with the Council’s approach to Discretionary Housing Payments (DHP), attaching conditionality and helping people into work through training.  The scheme was experimental but was making inroads at the margins. 

In response to a question the Panel heard that landlords had to pass a fit and proper person test.  All properties were visited and checked and the Council did not use any properties with a category 1 hazard.  The Panel heard that the banning of letting agent fees was unlikely to have an impact on the market because the costs would be passed on in other ways.

The Panel thanked officers for an excellent report and commented that the significant gap between Local Housing Allowance Rates and market rents in the City was likely to continue getting worse.