Dominic Lipinski/Reuters

London Councils Paid Private Landlords £15.8m in a Year to Get Them to Rent to Homeless Families

by Nye Jones

@nyejones92
4 July 2020
  • Estimated read time: 4 mins

After a period living in a women’s refuge, Iqra was homeless. At her first meeting with Lambeth council, her housing officer told her to view a series of private rented properties. A landlord agreed to house her in a third floor flat in Brixton. Iqra was concerned about moving into the property as it was in a bad state of disrepair, and she struggled to lift her daughter up the stairs because she had a bad back. But the council told her she didn’t have a choice, and smoothed things over by paying the landlord a £2,000 incentive to take her on as a tenant. 

Initially, Iqra’s concerns were alleviated by the promise of imminent repairs. But a year down the line she still had no running water in the mornings or evenings, the boiler still regularly cut out, and the windowsills were still rotten. She pushed her landlady to repair the property, but received an eviction letter in return. 

Since then, Iqra’s case has gone to court where a judge threw it out because the landlady hadn’t gone through the proper channels. Iqra says the stress and insecurity have had a lasting impact on her. “It has made me cry a lot, I had nowhere else to go”, she told Novara Media. “I was a domestic violence victim and me and my daughter are alone in this country. I was really scared.” 

Iqra’s case is not unusual. Across London, councils are paying landlords costly incentives to house tenants in private rented properties – many of them in poor condition.

Data obtained through freedom of information requests by Novara Media shows that in the 2019 calendar year, London councils paid cash incentives to private landlords to house households who were homeless or at risk of homelessness on 6,693 occasions, spending a total of £15.8m on these payments. This is a £2m increase on 2018 spending on cash incentives, despite not including the spending of Lewisham council, who refused to disclose their data, and Bromley council, who did not respond. 

Brent council topped the list, paying over £1.3m in incentives in 2019, while Barnet council, through their own in-house lettings service ‘Let 2 Barnet’, spent £1.28m. The highest single incentive paid to a landlord was £15,650, paid by Brent council. Camden and Greenwich councils could only provide data for the 2018/19 financial year rather than the 2019 calendar year.

 

This data on the increasing use of landlord incentives comes in the first calendar year after the passing of the Homelessness Reduction Act (HRA), a private members bill proposed by Conservative MP Bob Blackman which became law in April 2018. Before the HRA, councils had a duty to provide homelessness support (dependent on applicants meeting certain criteria) 28 days before they were due to become homeless. The legislation increased the time households are recognised as threatened with homelessness to 56 days in a bid to make councils act earlier to prevent homelessness occurring in the first place. 

At the time of its passing, Blackman wrote that the act was “a comprehensive change to the law which will shift the emphasis firmly towards preventing homelessness from ever occurring in the first place”. The act was also supported by the homelessness charity Crisis, while John Bird, founder of The Big Issue, said the legislation “recognised the beauties of thinking ahead of the crash”.

Jeremy* worked as a housing needs officer for a north London council, and was assessing new homelessness applications when the HRA became law in 2018. “There was initially some excitement around the change,” he told Novara Media. “But it became clear very quickly that its main impact was just pawning more people off to the private rented sector. In every session we were told to tell people that they would never get social housing, but that we could prevent their homelessness by paying an incentive to get them housed privately.”

Jeremy’s experience of a large number of households being housed in the private sector has been borne out in statutory homelessness statistics since the act was passed. Evictions from private rented tenancies are the biggest cause of homelessness in the capital, yet 52% of households housed through the new prevention duty in London have been placed in private rented accommodation, while just 23.5% have been moved into more secure and affordable social rented housing.

Increasingly, councils in London are paying private landlords financial incentives to take homeless households on, with research by the London School of Economics finding the cost of preventing a homelessness case in London is almost four times the average cost in England.

Izzy Köksal from Housing Action Southwark and Lambeth (HASL), a group which supports people making homelessness applications in the borough, describes landlord incentives as “a total waste of public money which could be used to get to the root causes of the issue, like acquiring more social homes”. According to Köksal, “tenants’ rights are so weak that putting people into the private rented sector just fuels a cycle of homelessness”.

Both Jeremy and Köksal say they have seen multiple examples of landlords giving tenants eviction notices just so councils will pay them further incentives to continue to house said tenants.

Sian Berry is the Green Party candidate for London Mayor and London Assembly Member. She told Novara Media that using private rented accommodation as a solution to homelessness is problematic because “there’s a culture of landlords using every trick in the book to get as much money out of their properties as possible, while not regarding tenants as people to whom they’re providing a service”.

She believes “there are many dominoes still to fall” in tackling London’s housing crisis such as rent controls, an end to no-fault evictions and reversing welfare cuts. She’s also advocating for more radical schemes like Capital Letters, where councils lease homes from landlords for long periods of time at social rather than market rents. 

In the end, she says “bunging landlords a few grand to get tenants out of your hair is not the way to solve the problem”.

The Ministry of Housing, Communities and Local Government said: “Our £20m Private Rented Sector Access Fund supported families at risk of homelessness, helping them access and sustain privately rented accommodation.” 

“This includes incentive payments to help families secure and sustain private tenancies. Without these payments it would be extremely difficult to gain access to privately rented accommodation, leaving thousands of families in much more expensive temporary accommodation.”

Lambeth council said they would need more details to comment on Iqra’s case, but stated: “Councils have a legal duty to prevent and relieve homelessness which means helping homeless people find somewhere to live. Lambeth takes this duty seriously and works hard to help every homeless person who comes to us.

“Helping homeless people find affordable private rented accommodation is an important part of our overall homelessness strategy. There is not enough social rented housing to meet all housing need through the provision of low rent council and housing association tenancies.  Therefore, all local authorities have schemes to help people find private rented accommodation.

“We carry out a housing needs assessment to identify the client’s housing requirements, such as affordability, size of property and location. We negotiate with landlords to secure rent levels which are affordable to people on benefits or low incomes.”

Lambeth also stated they have a series of minimum standards landlords must adhere to, and that most private rented tenancies are offered on a voluntary basis. 

*Names have been changed to protect identity.

Nye Jones is a freelance journalist specialising in housing and homelessness.

Published 4 July 2020

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