Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 4 weeks ago 36
A bombshell was dropped recently. Admittedly an expected Bombshell, but it took all us people working in the public sector by surprise in the speed of introducing the Homelessness Suitability Order, having hung around in the wings for over a year.
Since the advent of the Housing Act 1996 councils have been able to make offers of private rented accommodation to homeless applicants as a discharge of duty but the offer was always a voluntary take-up, called the “Qualifying Offer”. The new suitability order abolishes the qualifying offer, so, in short, a council can prevent homelessness by offering someone walking through the door, a 12 month AST.
If they refuse the offer and opt instead to go through the full homelessness assessment route the council have to oblige but if the applicant passes all 5 tests and is eligible for the full housing duty, what is likely to happen is they get offered the same property as when they first walked through the door. If they turn this down the council can stamp the file “duty discharged” and that’s it done. NEXT!!!!!
The Homelessness (suitability of accommodation) order (England) 2012 was, as seems to be this government’s style, hurriedly dumped in relevant laps with no time to cobble together any arguments. The order is in from 9th November 2012, or I should say, available to any council who choose to use it from that date.
The stated aim is to break the route between homeless applications and social housing. No more will people be able to go ‘Dahn the cahncil’ to get a council house. We haven’t got them; they’ve all been sold off.
Now there’s a caveat to this, in that the property being offered has to be suitable. There are 4 categories of suitability and the big fly in the ointment is that the property must be affordable.
In London, the gap between LHA levels and market rents means that many offers won’t be affordable, so where does that leave the council?
They have 2 choices:
• Procure enough PRS landlords willing to work with them so they can discharge their duty in an environment where homeless applications have risen 38% in the past year.
• Start discharging duty by sending homeless applicants to areas where the rent gap is affordable.
To use route one councils are going to have to seriously up their game and starting asking you lot what you need from councils to entice you to form a partnership and respond to what they are hearing (possibly flying pig land but hopefully not, if I have anything to do with it)
Route 2 relies on council members at committee level accepting the notion of out of borough placements, which becomes a political hot potato for them. Look at the furore when Newham announced they had approached Stoke about taking their homeless placements and Croydon when it came out they were doing the same with Hull.
So if council committees, fearful for the voter-base decide not to use out of borough placements councils will have to stack families in B&B waiting years for non-existent council and housing association properties to come up. This will bring the ire of central government and the press down on them for breaking rules about putting families in B&B for more than 6 weeks. It happened to Croydon recently following the Newsnight programme.
If they don’t have landlords working with them and they can’t use out of borough placements and they can’t put families in B&B they will have to pay the difference between market rents and LHA levels, just to get people sorted, which raises the very real prospect of the housing departments going bankrupt.
As you can see, for councils where local rents are far out front of LHA caps they are caught between the rock and the hard place. Smart councils will be looking to the PRS to help them cope, I’ve been banging on about this for a couple of years since I first saw the writing on the wall but as I travel around the country as a housing law trainer I see little ability in council’s being able to think in a more entrepreneurial way and that worries me.
Councils can come up with a wealth of strategies; the world really is their oyster in that sense. Localism has loosened up the way that they are allowed to operate, even turning a profit (In meetings you have to refer to it as ‘Income Generation’ in case those old council warhorses have heart attacks) but they can’t begin to get to those strategies until they learn to change their thinking about who they are and what they do.
Councils have decades behind them of being providers of services, they need to step down from that and start seeing their role as enablers and facilitators, working in partnership with PRS landlords and a range of external services, more like a hub of a wheel of services that they don’t necessarily have to provide themselves anymore.
Will they realise in time though? That’s the big question.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More