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There seemed little in the autumn budget that would excite the private landlord, unlike the ‘Private Sector Access Fund’ announced in the previous Budget; the Government would give £20 million to help the homeless, or those facing homelessness, to secure a sustainable and long-term tenancy.
I have waited to get more details before opening the bubbly, but the detail is what seems to be lacking.
Those landlords who have given their whole-hearted support to those bond schemes (a paper guarantee to a set amount which stands in place of the months deposit most landlords require) and deposit payment schemes that caring authorities have established over many years, may feel this Private Sector Access Fund plan will help them, perhaps by increasing funding to those schemes, allowing a higher bond to be paid, particularly for the most vulnerable.
Think again. This Private Sector Access Fund is to allow local authorities to expand their schemes, or to develop schemes to help the homeless into private rented sector tenancies. This seems to have had support from the charity, Crisis. I hope it works and that private sector landlords see some benefit from it.
It is wonderful to see the private sector mentioned without the usual invective of ‘Rogue’ included in Government pronouncements, but I do have a few concerns.
£20,000,000 from the Private Sector Access Fund sounds a great deal of money, but think how many people are in need now, and how this will expand over the coming years. If this is funding for council initiatives, there will be high costs to setting up a new scheme.
The success of the schemes I know about did not happen by magic; they took years of working with private sector landlords, fighting the suspicion that the bureaucracy would be prohibitive, until there was a working relationship of mutual trust; then there are normal working practices – devising the necessary documents and accounting for the man-power needed to run the scheme successfully.
Once the scheme is up and running, there are the on-going costs of inspections, of renewing contracts, inspecting repairs, keeping up with the legislation. The scheme I was involved with required no on-going in-put from the local authority, it was done by the scheme, which allowed a close working relationship with both landlords and tenants and cheaper costs to the authority.
Is it the small local landlords that councils will include in their plans? It seems more and more legislation is aimed at the corporate landlord. The decent small landlord is side-lined into lease arrangements. Yes, this gives a regular income, but there is a cost – the rent that may be payable will be less than market rents – because all the things that the private landlord used to do need to be done by council employees. Councils are so busy criticising the private landlord with a small to medium portfolio that they believe they have the skills needed and can replace them.
I believe that any private landlord that is happy to lease his properties to the council (and there are some for whom this works very well) should do so. I just feel that the additional funding is unlikely to dribble down to the landlord who buys a couple of properties for his retirement fund.
Just to be clear as I end – I do not believe that the Council can replace the private landlord. They will deal with tenants to whom they have no responsibility, no requirement to communicate well with and be tied to an office. Private landlords will, in many cases, be dealing with friends. Will the council provide selection boxes for their tenants, or understand that at Christmas, there may be weeks’ rent arrears? Somehow, I doubt it.
The Private Sector Access Fund may be a step in the right direction, but the bubbly will remain on ice.
For advice on buy to let issues – Ask Sharon