Improving access into private renting for single homeless people
The private rented sector is required to play an increasingly important role in helping end homelessness.
For lots of single homeless people it’s often the only housing option available to them. We know that with the right support in place for both landlords and tenants it can work well as a long term housing solution for people moving on from homelessness.
Too many people who are ready to move on after the devastation of homelessness however, encounter unnecessary financial barriers and locked doors. Our Crisis Skylight services frequently report the problems , including the willingness of landlords to let to homeless households and difficulties saving for deposits, rent in advance and letting agency fees. These problems are particularly pronounced in markets where demand for homes is especially high.
In order to explore these issues in more detail, Crisis commissioned the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University to conduct research to explore these issues further. The study comprised of an email and postal survey of 806 private landlords who let homes in England, a face-to-face survey of 103 homeless people, and a survey of 58 local authorities.
We found that:
- 82% of landlords surveyed are unwilling to rent to homeless people. Reasons included a perceived greater risk of rent arrears and requirements for more intensive management. Welfare reform, in particular changes to direct payments brought in by Universal Credit and caps to Local Housing Allowance (LHA) rates, are making landlords much less willing to let to homeless people and tenants in receipt of housing benefit.
- In addition to very high access costs across the sector, there is evidence to suggest that landlords are putting additional financial ‘safeguards’ in place when renting to homeless people, making it even more difficult for them to rent privately. This includes increasing the deposit required, increasing the contractual rent, increasing rent in advance as well as more extensive use of guarantors and referees. The research also showed that homeless people are struggling to meet these demands. 62% of homeless people surveyed who had been asked to provide ‘additional security’ reported being unable to do so and, as a result, most of these respondents reported being unable to find anywhere to rent at that time.
- 72% of homeless people surveyed said that difficulties they encountered when trying to find somewhere to live in the private rented sector were insurmountable and 80% reported difficulties raising a deposit.
Our key recommendations:
- Providing more support for private rented sector access schemes. Private rented sector access schemes support homeless people to overcome financial and structural barriers to create and sustain tenancies. Schemes attract landlords through the development of a suite of services to mitigate the many of the risks that landlords we surveyed highlighted as factors that would put them off letting to someone who was homeless and in receipt of housing benefit. There is strong evidence to support the cost effectiveness of this work. We therefore urge the government to continue to make dedicated funding available for private rented sector access schemes.
- National government should underwrite a national rent deposit guarantee for organisations supporting homeless people to use in place of a cash deposit. A bond guarantee is a written commitment from a private rented sector access scheme to help secure accommodation for homeless people in place of a cash deposit. They play an important role in helping homeless people overcome the significant financial barriers to accessing private renting and help reduce financial risk for landlords should damage occur and, in some cases, rent arrears. Government help to underwrite bonds will expand the important work that schemes do, therefore helping to increase the number of properties available to let to homeless households.
- National government should create a quality mark to ensure that organisations accessing government underwritten bonds provide a high standard of support. In order to ensure that bond guarantees are accompanied by robust support for tenants and landlords, private rented sector access schemes should have to demonstrate that they meet a certain standard in order to access bonds underwritten by national government. Robust support helps reduce the number of claims made against bond guarantees, therefore minimising the overall costs to government, as well as ensuring that tenancies are sustained and homelessness is ended.
The calls for change on this issue are growing. Only last week, the Centre for Social Justice published its report highlighting the challenges of renting for people on low incomes and calling for government funding to be made available for PRS access support. It’s clear that the government must take action to tackle this homelessness trap.