The keys to unlocking private renting: help to rent schemes

Hannah Gousy, Head of Policy and Campaigns

08.03.2017

Today Phillip Hammond delivered his first Budget since the EU referendum. And we were watching closely to see what it meant for homeless people.

Last autumn the Chancellor made a bold commitment to ban letting agency fees- a move that will make a considerable difference for people struggling with high housing costs. There was also a nod to the role that social lettings agencies could play in securing homes for those grappling with the high cost of housing in the Government’s recent housing white paper. Whilst these measures are extremely welcome, they would not help overcome the much higher set of barriers that homeless people face.

Would there be more in store to help homeless people today? Unfortunately, not.

For many people private renting is often the only option for them when they are trying to escape homelessness. But they face two major obstacles in doing so. First, the very high costs of moving into a tenancy. It can cost as much as £2,290 to gain access to a one-bedroom flat and the average cost of a deposit is £1,197.63. In London that figure rises to £1,760.30. Secondly, our research found that over 80% of landlords were unwilling to let to someone who is homeless largely because they perceive the risk to be too high.

Our Home campaign is calling on the Government to ensure that the right support is available to help people in England access private renting as a route out of homelessness.  Ahead of the Budget, we had been asking Government to:   

• fund local Help to Rent projects wherever they are needed to work with landlords to help homeless people rent.
• set up a national rent deposit guarantee for projects to use in place of cash deposits. Underwriting this on a national scale would be more efficient and less confusing than the myriad local deposit schemes currently in operation. It would also free up vital funds for projects to do more of what they do best: supporting homeless people, vulnerable tenants and their landlords.

This campaign has overwhelming support from throughout the sector. Importantly schemes help tenants with the upfront costs of renting and help build the confidence of landlords, thereby opening up the market. Both the National Landlord Association and the Residential Landlord Association support the expansion of Help to Rent schemes to give landlords the peace of mind they need to rent to people who have experienced homelessness.

What’s more make it makes financial sense

Crisis recently commissioned Westminster Policy Institute (WPI) Economics to identify the cost benefits to the Government of both funding accredited Help to Rent projects and establishing and underwriting a national rent deposit guarantee.

In order to provide this support to homeless people, the Government would need to provide £31 million to fund the annual costs of a rent deposit guarantee scheme and Help to Rent projects with £47 million for the first year costs.

At Crisis, we’ve spent years working with local projects that support homeless people to find and, crucially, keep a home. During 2010-2014, these projects created over 8,000 tenancies and ensured that 90% lasted beyond six months. An evaluation found, on average, in just three months of operation 92 schemes saved a total of £13,546,151 in non-housing costs, to the public purse. The costs savings are clear.

Whilst this Budget did not bring new funding for this important service, we will continue to build on the wide range of support from landlords, local authorities and politicians from all parties to ensure that anyone experiencing homelessness can access a home and successfully rebuild their life.

Back the campaign You can find out more and help us continue to campaign here: www.crisis.org.uk/homenoless