Private rented sector landlords are turning away from local authority tenants, as a result of changes to the benefits system. A benefits cap, and the so-called “bedroom tax” are forcing local authority tenants to rethink their housing priorities, with several consequences.
One of these is that tenants are moving from more expensive to cheaper areas. And councils with too much demand than can be met by housing association stock, are looking to the private sector for rented property.
The issues were debated by the London Assembly’s housing committee recently, who called local authority representatives to speak to them about the issues the changes were raising.
“I can foresee additional pressure on the private rented sector,” said councillor Jayne McCoy, chair of the housing, economy and business committee at the London borough of Sutton. “It is harder and harder to find private sector landlords who will offer temporary accommodation to a local authority, so we have seen a big gap there; and it is just going to be harder and harder.” Councilllor Dudley Mead from Croydon agreed: “It is getting increasingly difficult to persuade private landlords to give us their properties.” One solution in his borough has been for the local authority to pay landlords directly by monthly direct credit, effectively overturning recent government changes. “Our covenant to pay is copper-bottomed,” he said.
In Hackney, councillor Karen Alcock said the local authority is proactively looking to handle the letting of private rented properties directly. “We are actually going to try to take private rented sector properties away from the lettings agencies and use them ourselves with our own stock.”
In Sutton, said McCoy: “We have seen increases in rents and also a reduction in people prepared to rent their property, not the bigger ones but certainly the smaller private landlords.”
Alcock summed up the problem local authorities face, in a competitive market such as Hackney: “Why would you go to the LHA when you can get four young professionals paying £200 plus a week?”