Help to Rent funding will help many more people find a home in the private rented sector – but what's needed next?
Last week the Government announced the allocation of £19.5 million to fund 54 projects across England to help people find a home in the private rented sector. These Help to Rent projects will support people who are homeless, or at risk of becoming homeless, to secure their own home.
People experiencing or at risk of homelessness face significant barriers to finding a home in the private rented sector. A 2016 survey of landlords found that more than half were unwilling to let to tenants in receipt of housing benefit, and 82% were unwilling to rent to people who are homeless.
Help to Rent projects are critical in helping to overcome these barriers and making the sector work for both landlords and vulnerable tenants. Schemes can provide a rent deposit guarantee in place of a cash deposit, training for both landlords and tenants to help them understand their rights and responsibilities, and ongoing support to ensure the tenancy is sustainable.
Following our Home. No less will do campaign, the Chancellor announced in November 2017 that £20 million would be made available for schemes that support people at risk of homelessness to access and sustain tenancies in the private rented sector. Eighteen months on its great that we’ll soon start to see the benefits of this money, as successful local authorities set up or expand projects that help end people’s homelessness by helping them find a private rented home.
Case for national roll out and deposit guarantee
WPI Economics estimated that it would cost £24.1 million to make support available to all households. This would have ensured that 32,000 people could receive support each year. We hope that the new programmes will prove how effective this approach is and help make the case for national roll out.
Whilst the announcement is very welcome, in order to make Help to Rent most effective we still need a national rent deposit guarantee scheme in place. A bond guarantee is a written commitment that a Help to Rent project can provide in place of a cash deposit. Bond guarantees play a critical role in helping people who cannot afford the high upfront cost of a deposit to secure a tenancy and they help reduce financial risk for landlords in case damage occurs.
Although the claims rate for bond guarantees is relatively low, schemes are limited in the amount of bonds they can provide because they need to keep a much larger guarantee fund just in case the funds are needed. A national rent deposit guarantee underwritten by the Government would provide individual projects with greater financial security. This would allow Help to Rent projects to provide bond guarantees for many more people, helping them to overcome the financial barriers to accessing a private rented home and ending their homelessness.
Increasing funding for national roll out of Help to Rent projects and underwriting a national deposit guarantee scheme would help ensure the private rented sector is fit for purpose as a solution to homelessness.
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