WIDER POLICIES
Commentary on Housing Policy

Improving access to the private rented sector

The general thrust of Government policy to address the problems of homelessness - at least in England - is by increasing access to the private rented sector.  A major barrier to achieving this is often the necessity for a cash deposit and rent in advance. Other barriers, though less visible, are landlords' reluctance to accept Housing Benefit and many people's lack of understanding of their responsibilities as a tenant.

One possible solution to this problem is a national rent deposit scheme.  This could potentially improve access to private rented housing for single homeless people, since many on low incomes cannot afford to pay a deposit.^[1] One main difficulty with current voluntary rent deposit schemes, particularly in areas of high housing demand, is finding landlords willing to participate as they can find tenants not reliant on Housing Benefit.  If there were a statutory scheme where money is deposited on behalf of a tenant, the tenant would then, in theory, be free to seek accommodation with any landlord.^[2]

Providing a guarantee/deposit nationally also presents an opportunity to offer other key elements of support in conjunction with the guarantee.  One model for such a service is the Crisis Smartmove initiative, which provides homeless or vulnerably housed single people with housing advice and access to good quality accommodation in the private sector.  In particular, it offers landlords a guarantee in place of the traditional deposit and a range of benefits and support. It also provides tenants with ongoing support and advice to enable them to sustain their tenancies, as well as befriending support from volunteers for new tenants who may be living independently for the first time, and provides support to landlords if problems should arise.  If private rented accommodation is not appropriate, the SmartMove worker will assist the applicant in finding alternatives such as supported accommodation or local authority housing.

Other suggestions that have been made include reform of capital gains tax, subsidies to encourage institutional investment in the sector, mechanisms to guarantee sub-market rent where there is a need for affordable housing, and encouraging Registered Social Landlords to invest in the private rented sector.^[3]

Improving access and increasing supply of affordable rented housing

Increased availability of empty homes or a tenancy deposit in the private rented sector may help improve access, but can it be assumed that it will do enough to address the full scale of the problems of suitable housing for homeless people?

A quick examination of the figures suggests that this is doubtful.  The number of homes for rent from local authorities and registered social landlords in Great Britain fell by around 600,000 between 1997 and 2004, whilst the private rented sector has 'only' increased by around 200,000 homes^[4]  and the number of low income households in the private rented sector has increased by 150,000.^[5]  Reflecting this, the recent Barker Review of Housing Supply sponsored by the government estimated that the number of new social homes in England needs to increase substantially, from 30,000 a year to 50,000 a year, and even this increase would only meet newly arising need rather than past shortages.

In Scotland, housing plans have to consider the needs of homeless people but this is not the case in either England or Wales. 

In England and Wales, the conclusion is that the UK Government (with regards to England) and the Welsh Assembly (with regards to Wales) should review their existing suite of policies from the specific perspective of homelessness, either to demonstrate how they will be sufficient to address the problem of a shortage of suitable housing for homeless people or to complement existing policies with some additional initiatives relating to the supply of suitable social housing.  Such a review would complement the recent Barker review by focussing on the particular needs of one group of the population, namely homeless people.

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End notes

[1] The National Rent Deposit Forum 2002 report entitled Rent Deposit Schemes states that "most clients seen were single, young and male".  Back to text

[2] At present, some get help from voluntary or local authority schemes (rent deposit schemes or deposit guarantee schemes) which either pay the money on the tenant's behalf or provide a guarantee to the landlord that the money will be available should the landlord have a legitimate claim to it at the end of the tenancy.  Back to text

[3] Private renting: a new settlement, Shelter and Joseph Rowntree Foundation, 2002. Back to text

[4] ODPM live table 101. Back to text

[5] ODPM live table 718, using the figures for the numbers of households in private rented accommodation who are in receipt of Housing Benefit. Back to text

Page last modified on 22/06/2006 at 11:37