Letting agents and landlords could be missing out on £61m of rent every month because families in temporary and emergency accommodation may not be able to afford deposits to rent privately.
Ajay Jagota - head of the #ditchthedeposit campaign and founder of deposit-free renting initiative Dlighted - says official figures show the number of families living in temporary accommodation has risen by 500 per cent since 2009.
This means there are 78,930 families – including 120,510 children – currently living in emergency housing, he says.
Jagota says some £845m of taxpayers’ money has been spent on temporary accommodation for homeless families since 2010 with additional emergency housing currently costing the government £160m every year.
He says that if these families were living in permanent private rented sector properties and paying the average UK rent, this would mean £60,933,960 of rent would be paid into the sector each month, totalling £731m a year. This in turn would be spent in the wider economy.
“It’s heart-breaking that so many people have no permanent roof over their heads, children in particular. What is frankly scandalous is that it doesn’t have to be this way. This appalling situation is inevitable but in many case entirely avoidable given landlords and letting agents perverse insistence on only renting properties to people who can handover an average of more than £1,000 in deposits” claims Jagota.
“No-one is saying that deposit costs are the only cause of homelessness but if you’re a landlord or letting agent and you can’t rent out a property, ask yourself why that is case when there are enough people to fill a town the size of South Shields, Burnley or Carlisle who are literally desperate to rent a permanent home” he adds.
“At a time when the government’s own impact assessment is predicating the ban on Letting Agents Fees will cost the industry hundreds of millions of pounds and even force letting agencies out of business, the industry has to ask itself whether or not it can afford to write off that sort of income, especially when deposit replacement insurance offers far superior protection against unpaid rent, property damage and legal fees.”