Landlord incentives branded a ‘waste of public money’ by Generation Rent

Generation Rent has accused landlords of ‘rigging the system to line their own pockets’ after findings revealed councils are spending millions of pounds in one-off incentive cash payments to private landlords to house homeless people.

Generation Rent sent a Freedom of Information (FOIs) request to 32 London councils who provide statutory homelessness services and the ten councils outside of London with the biggest statutory homelessness issues.

The findings revealed 37 councils spent more than £31m on one-off cash payments to private landlords on 10,792 occasions in 2024-25.

The National Residential Landlords Association (NRLA) has hit back at the findings, claiming the payment incentives allow landlords to take on families who are likely to fall into arrears.

Landlords are often a law unto themselves, rigging the system to line their own pockets

Ben Twomey, chief executive at Generation Rent, said: “Everyone needs a home, it’s the foundation of our lives. But the rental market is like the wild west. Landlords are often a law unto themselves, rigging the system to line their own pockets at the expense of people experiencing homelessness and the local councils that are trying to house them.

“The soaring cost of renting and the government’s decision to freeze the Local Housing Allowance has put councils across the country in a near impossible position.

“In a desperate bid to avoid placing people in temporary accommodation, they’re forced to pay individual landlords sometimes tens of thousands of pounds just for them to agree to rent out their home. It’s a senseless waste of our public money.”

According to the research, 27 councils spent over £24 million on landlord incentives in 2024/25, an average spend of over £900k per council.

Six London councils reported paying £10,000 or more for a single incentive payment

Compared to 2018, the overall money spent by councils in London has increased by more than £8.5million (54%).

Meanwhile, in 2018, only one council in London reported paying an incentive of £10,000 or higher, whereas, in 2024/25, six London councils reported paying £10,000 or more for a single incentive payment.

According to the data, the councils with the highest annual spending were Manchester City Council (£3,345,411.95), Enfield Council (£2,730,337.42), Ealing Council (£2,259,913.77), Birmingham Council (£1,657,605), and Nottingham Council (£1,595,276).

The largest single incentives paid to private landlords were £15,385.44 by Southwark Council, £13,500 by Camden Council, £13,000 by Hammersmith and Fulham Council, £11,367.42 by Ealing Council, and £10,700 by Brent Council.

Helps landlords cover their costs and to offer accommodation

The NRLA defended the use of these incentives, arguing that they helped landlords cover costs, claiming the incentives help landlords to cover costs.

Chris Norris, the policy director at the NRLA, told the Guardian: “Landlords are increasingly finding that people who are reliant on local housing allowance or universal credit simply can’t afford to rent, and the incentives allow landlords to take on families who were likely to fall into arrears.

Mr Norris also explained to the Guardian the incentives were offered to landlords to get them to take on tenants “perceived to represent a higher risk”, such as people with substance abuse issues or who had come out of prison.

Mr Norris explained to the Guardian the incentives fill a gap for vulnerable tenants who would otherwise find it difficult to find a place to live.

He told the Guardian: “Frankly, it does a job and it’s probably the least bad option available to a lot of local authorities at the moment.

“It helps landlords cover their costs and to offer accommodation, but it would be far more efficient and equitable if the government actually ensured there was a welfare system that allowed people to access homes in the first place.”