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TODAY'S OTHER NEWS

Public money to pay deposits for some homeless renting privately

The government has announced that over £19.5m is to be spent on paying deposits or paying the first month’s rent for homeless people moving into the private rental sector. 

Councils will use the funding boost to help vulnerable people secure their own tenancy through support such as, paying deposits or putting down the first months’ rent.

The Ministry of Housing, Communities and Local Government says this will give the homeless an opportunity to make a home in a property they may otherwise not have been able to access.

This funding forms part of the £100m Rough Sleeping Strategy which the government claims will “end rough sleeping for good.”

Housing minister Heather Wheeler says: “I want everyone to have the security, dignity and opportunities they need to build a better life – at the heart of which is ensuring everyone can find a safe and secure home to call their own.

“This funding will make a huge difference in opening up the private rented sector to people who need it and give them the chance to rebuild their lives.”

The government says that, additionally, local authorities can also bid for a share of up to £26m of Rapid Rehousing Pathway funding for 2019 to 2020.

It says this extra investment can be used to fund innovative local schemes which help those sleeping rough and struggling with mental health problems or substance misuse issues. 

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    I’m not interested in a deposit…it’s a homeowner guarantor I want! Govt. could make the deposit and first month’s payment on a Ferrari or a super yacht for someone…doesn’t mean they’ll have the ability to continue paying. And worse than those examples, where the unpaid for item would be quickly taken back, a landlord is effectively forced to continue to allow them use of the property all with no further payments!

    It is the responsibility of Govt. and Local Authorities to look after its peoples, not landlords…cover the entirety of the potential arrears/damages or clear off barking at the private sector’s door! Stop passing your problems off or change the law to make individuals wholly responsible (an attachment to benefits might be an absolute minimum start-point).

    I’ve been saying it for the last fifteen years, but I think there’s more chance that as the use/insistence on guarantors because nationwide, Govt. are more likely to try and legislate *against* their use as a ‘solution’ for landlords. Aside from having wider legal consequences, that really will see the collapse of the PRS.

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    • 05 March 2020 08:43 AM

    Its not a homeowning guarantor I want it is a homeowner who can qualify for RGI for the tenants tenancy.

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    Who do you use for RGI, Paul? They’ll do it on guarantor will they? Locally it’s not been possible as tenants are credit useless, but if it can be obtained on the guarantors’ credit status, I may give it another look.

     
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    • 05 March 2020 09:20 AM

    Yep perfectly possible on the homeowner guarantor.
    However I have never in 10 years ever been able to source any tenant who could source a homeowning guarantor.
    Only 1 tenant ever qualified for RGI and that cost the RGI insurer £10000 when I had to claim.

    The fact is as you have stated that for the most part tenants are credit useless.
    This leaves the LL bearing the costs of rent defaulting tenants which usually involves the LL evicting.

    Being a LL without RGI on a tenant or homeowning guarantor is a very risky business.

    I got my RGI policy via Best Insurance.
    But there are of course other providers.
    Cost me £89 for an annual policy with NO excess.
    I believe another good RGI policy is 99Home who have bought LRS.
    Homelet quoted me £500 for the same policy I got for £89!!
    Another popular RGI choice is with Alan Boswell.
    Though of course LA may have other suggestions as to who are good RGI
    suppliers.

    Shop around as they say!

    One word of warning.
    Before taking out RGI find out what the claim requirements are and ensure you can meet these at the outset of the tenancy.
    If you can't then obtaining a RGI policy is pointless as any claim would be declined by the insurer.



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    Obviously a regional thing, as I currently have 350 homeowning guarantors (none with RGi) and have never lost out on the scores of them I’ve claimed from over the years. RGI might save me the, almost weekly, Court headache though.

     
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    • 05 March 2020 09:36 AM

    I'm in the supposedly rich SE!
    Cashflow is the problem though.
    It can take years to get money from a guarantor.
    Even with RGI you need a couple of months mortgage payments as well as service charges and ground rents before the RGI claim is processed and starts to pay out.
    One main advantage of RGI is the insurer endeavours to evict the tenant the quickest way possible.
    The quicker they can get rid of the tenant the less the claim is!

  • Matthew Payne

    I like Heather's ambition to support these people, but this proposal opens up the PRS to greater opportunity for the most high risk tenants? How is that? Landlord confidence aside riding at an all time low off the back of recent legislation, I am sure that very few lenders would allow their charges exposed in this way. Lenders are more risk averse than landlords and they certainly wont want even the slightest possibilty of attracting the inevitable public witch hunt having to repossess and evict a former homeless person, as through no fault of their own, the Housing Minister commited them to a tenancy they were never going to be able to afford from the second rent due date.

    Every time HMG comes up with a proposal in the blue sky thinking room, before they go public, they really should just pause for thought and do a bit more brainstorming on the Q, "How is this going to work?"

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    LLs are not supposed to rent property that is not affordable to a tenant. This is the Govt. doing excactly that!!

     
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    We had the local council do this for several tenants two years ago. They either have a paper bond and paid the first rent or cash deposit and the first rent. Helping the tenant through the Benefits claim etc. The ones with bonds (we took on 11 tenants and are now left with 2 who pay) we are still chasing the council for the bond money. Needless to say the 9 who were evicted were on S8. Some of these tenants were working also but on low incomes. This system does not work. It all looks good on paper but the system is not working. Better the old days where the council took the tenancy and sub-let. They are then responsible for chasing their tenants. I suspect this was scrapped as their tenants didn’t pay and it became too costly for the author?

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