PDPLA comments on the Draft Portsmouth Homelessness Strategy 2018-2023
Portsmouth and District Private Landlords Association represent over 200 members in the Portsmouth area. Some have only one or two properties others larger portfolios. In addition to representing them locally and nationally we have monthly meetings and news letters to inform members of legislation and good practice and to discuss issues of concern. We are affiliated to the nationally recognised Residential Landlords Association who provide members with up to date documentation, training and a helpline.
Considering that nearly half of those made homeless are in this position due to the ending of a PRS tenancy we are surprised that Landlord Associations have not as yet been consulted on the strategy to reduce homelessness. We are keen to help develop Portsmouth’s strategy further but must point out the grim reality that the PRS is growing at the top end and shrinking at the bottom (largely as a result of government actions and initiatives over the past decade). Landlords will require a lot of support and in most cases money to entice them back into the benefits dependent sector in the short term.
It was not announced in time for this report but the Government announcement that under Universal Credit it will eventually be much easier for landlords to get the rental element paid direct will eventually have a significant impact on the number of repossessions for rent arrears. We have been asking for this change since the Government introduced the policy. Sadly, it has done irreparable damage and it may take a generation or more to entice landlords who have lost thousands of pounds back to the benefits sector.
Understanding the stats.
Looking at the Causes of Homelessness data, a number a causes seem to be rolled into one: the loss of a PRS tenancy. Without a better understanding of the real cause of over half the applications we have no chance of reducing numbers. Recent research by the Policy Evaluation and Research Unit at Manchester Metropolitan University found that low LHA rates were the main factor but they acknowledged that affordability, competition for accommodation, changes in and lack of access to social housing, and wider policy changes are affecting the lower end of the market. One of their recommendations was that more research is undertaken on how and why landlords use s21 notices (so called ‘no fault’ evictions), and on the implications of restricting ‘no fault’ terminations. This is exactly what we need in Portsmouth.
From their national survey of why PRS tenancies were ended they found the causes to be-
- • Rent arrears - 37%
- • ASB- 9%
- • Damage- 9%
- • Selling or moving back- 15%
- • Renovation- 5%
- • Increase rent- 4%
- • Other- 21%
This indicates that well over half of the evictions are the result of tenants not meeting their obligations. Most landlords have mortgages, if they do not make their repayments their property gets taken away.
It would be useful to-
- • split rent arrears into genuine hardship and poor money management
- • split renovation into to meet regs or to upgrade and increase rent?
- • understand how many landlords are selling as no longer profitable?
- • understand how many agents have been evicting tenants to create ‘churn’ as they can then charge fees for setting up a new tenancy. (This should end when the fees ban comes into force.)
Potentially important is how often landlords just pay the tenant to go to avoid the expense and delay of using formal methods? Where tenants have addiction issues sadly this method is the easiest but hardest to get figures on. Neither party is likely to own up to it.
Increasing the availability of affordable PRS accommodation.
PDPLA would like to understand
- • how ‘Rent it Right’ is progressing and what the scheme offers that is not already available to landlord association members.
- • how PCC plan to “work with landlords to address the shortfall between Local Housing Allowance entitlement and rental charge.”
- • the offers PCC are planning to “help remove the current barriers for some homeless households in accessing the private sector.” especially any “rental top-up arrangement for some households on benefits.”
It is clear that there is a crucial role to be played by Private Sector Housing and the need for the right style of management and leadership. Without the right leadership ‘Rent it Right’ will waste a lot of money and end up going the same way as LAS. Good landlords need to be supported not chased away.
Looking at what is available on Rent it Right, there is hardly anything other than room lets on offer and the average rent must be around 50% more than the £69.04 pw LHA rate.
The current actions of Private Sector Housing (standards) are encouraging good landlords to reduce numbers and up rents. Landlords who previously charged 5 tenants LHA rates (£69 pw) for a room are now charging 4 tenants over £90 per week. They are easily £100 per week better off; they also avoid the additional costs of Mandatory Licensing and find the more ‘professional’ tenants less demanding. Perhaps this policy was meant to hit student landlords but we have one non-student member who has gone up market on 5 x 5 bed HMOs. The result is we have lost 25 affordable rooms for non students and this is just one small scale landlord, we know there are others. If the would be tenants find any accommodation they can afford it is likely to be sub-standard and below PCC’s radar.
Sustaining existing tenancies.
We think a plan to “enhance the development of life skills for young people, better preparing them as they progress on to living independently of support and sustaining accommodation.” is an excellent idea. To many young people enter the sector with no understanding of their responsibilities, some do not even understand that they will have other bills to pay beyond the rent.
We would like to help Housing Options understand how they could “identify circumstances that could place a tenant's housing at risk are pursued at the earliest opportunity. For example, the first time a tenant misses a rent payment.” This is a change of approach that will reduce homelessness.
Tax changes and increased legislation are leading to good, experienced landlords selling up. They are often replaced by the inexperienced and poorly informed. Where these landlords meet poor and vulnerable tenants the chance of tenancy failure are high. There are also unscrupulous landlords who take advantage of desperate tenants. Sympathetic housing standards officers should follow up on the placement of vulnerable tenants and offer training to green landlords and take action against the criminals. Too often we see them focusing on established student landlords which has no benefit for the city, it just makes the officers jobs easier (and less worth retaining in the longer term)
Security of tenure
The government have announced plans to stop Section 21 being used to regain possession. They want to improve security of tenure. If they introduce a dedicated housing court and change the repossession procedure it will have an impact locally. Unless a new and very efficient housing court is put in place first, landlords will be even less likely to accept the poor, the vulnerable and anyone on benefits.
“No Fault Eviction” is a misnomer. Landlords do not remove tenants without good reason. It is already an expensive and drawn out process. There are serial rogue tenants who abuse the system, paying the initial deposit and one months rent and nothing more for months while the landlord tries to remove them and then move on and do the same elsewhere. If new measures are put in place to assist landlords deal with tenants not meeting their obligations good landlords would be encouraged to invest and increase supply. Only by increasing supply can we improve affordability.
The future of an ‘affordable’ PRS
Over 10 years ago and before the introduction of LHA, housing those on benefits was good business. Borrowing money was easy, regulation was light and enterprising individuals with very little capital could build up large portfolios of property. This coincided with the selling off of social housing so demand was high. Today there is no incentive to house benefits claimants especially the poor and the vulnerable. Homelessness will increase until there is an incentive for landlords to invest or the social sector expands dramatically.
We know that there are landlords clinging on to empty houses especially HMOs. Some will sell to green landlords. Some will sell to the latest buzz - serviced accommodation: posh houses with rooms at £500 pcm. We see no sign that they are being made available to those at the opposite end of the market. Grants with conditions may persuade some to take in the homeless. They must be made aware of the PCC managing agency scheme.