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Assuring Rent to Combat Homelessness

Assuring rent can combat homelessness – and one city council intends to prove it.  The coming of the Homelessness Reduction Bill is forcing local authorities to look at innovative ways of working with the homeless.

For a long time, the private rental sector has been used by local authorities to house those they could not accommodate themselves. Many local authorities have established or supported bond schemes since the first was started in 1993. They took the place of cash deposits by providing a promissory note which could be claimed from at the end of the tenancy.

Bond schemes got another boost in 2007 when the tenancy deposit protection schemes came into being as where no money changed hands, no deposit protection was needed and landlords are notoriously not fond of bureaucracy.

As time has gone on, legislative changes and greater numbers seeking accommodation, have found good private rented properties in high demand; private landlords can afford to be discriminating in those they accept. Never easy to accommodate, the vulnerable, the benefit dependent, find they are even less wanted.

Oxford City Council have come up with an innovative scheme to combat homelessness, which they believe will persuade private landlords to accept what were previously the unacceptable, and at the same time, assist the tenants they are helping to maintain their tenancies and move into paid work.

Over the next two years, they are piloting a scheme which will guarantee rent to the landlord who takes on tenants that perhaps previously have been susceptible to being evicted and becoming homeless. The plan will involve the Council paying the rent for vulnerable tenants in a private sector property but the assisted tenant will be expected to take positive and recognisable steps to obtain work, or better paid work, to increase their incomes. This may include taking training courses – it will not be sufficient to limit job searching to fields they already are familiar with – they will be expected to gain new skills, to widen the opportunities for work.

The problem with high demand areas has been attracting landlords prepared to accept the poorest and most vulnerable, so this approach could be very attractive to private sector landlords. Whilst bond schemes may guarantee up to a months’ cover for rent arrears and/or damages, this is usually not payable until the tenant has vacated. It is also rarely enough to cover either the damages or, more seriously, the rent arrears that are left.

Oxford’s scheme will pay landlords 3 months’ rent in advance. In addition, support will be put in place to meet the needs of the families being assisted. Tenants will not be able to accept the help and then sit back. It will be made clear that tenants who are not actively trying to improve their circumstances will be evicted.

Local authorities need to accept that social housing cannot keep up with the demand, and despite ambitious plans for building, it will be a long time before they can house everyone that needs it. They must therefore increase the help they are prepared to give private landlords if they want them to take as tenants those evicted from properties and with a history of rent arrears. This scheme would help landlords, house tenants and also improve their long-term life prospects. This is a model that should be copied. Perhaps then the broken housing market can be mended and the problem of homelessness reduced.

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