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CHAPTER SEVEN - ASSISTED ACCESS TO PRIVATE TENANCIES

Overview

7.1 The reducing supply of social rented housing and the recognition of prospective broadening of rehousing responsibilities towards homeless people has encouraged many LAs to look towards the private rented sector. Helping single people to access private tenancies has been a standard local authority 'homelessness prevention' activity over a long period. In many areas, rent deposit schemes targeted mainly on 'non-priority' homeless households are long-established. In the past few years, however, growing numbers of authorities have stepped up their activities in this area. As noted in Chapter 1, recent ministerial comments suggest that the Executive will be looking to the continuation of this trend.

7.2 The national survey found that assisting people at risk of homelessness in accessing private tenancies was widespread across Scotland. As recommended in the Code of Guidance ⁴³, most authorities (30 of 32) operated some form of rent deposit (or Rent Deposit Guarantee - RDG) scheme. Nineteen schemes were run by external agencies on LAs' behalf. Six of these were operated by Cyrenians. Other operators included agencies created specifically for the purpose.

7.3 However, as shown in this chapter, whilst LA action to help people into private tenancies frequently takes place within the context of RDG schemes, the provision of a deposit or guarantee is often among the least important aspects of the overall service.

7.4 Some authorities operated a whole range of schemes aimed at helping people at risk of homelessness gain access to (or retain) private tenancies. City of Edinburgh Council, for example, had a dedicated private sector team dealing with landlord accreditation, registration and advocacy between tenant and landlord. The Council also operated an early intervention team providing advice and assistance to help existing private tenants retain their tenancies. The Council's housing options team (homelessness casework staff) provided advice and assistance about the private sector, including advice with respect to legal issues, harassment and Notice to Quit. The authority was also operating a private sector leasing scheme, with the aim of increasing the current portfolio of 400 properties to 1,500 over the next five years. The scheme was open to anyone assessed as non-priority homeless. In addition to all this, the Council procured an RDG scheme through Cyrenians.

7.5 The remainder of this chapter draws on the national survey and on case study work focusing on RDG schemes in East Dunbartonshire, North Ayrshire, Renfrewshire and Stirling.

Provision of rent deposits (or guarantees)

7.6 The need for RDG schemes arises from that fact that many landlords require new tenants to pay or lodge some form of bond as a security against the possibility of damage to the landlord's property or the abandonment of the property with rent unpaid. Where the tenant meets all the conditions laid down in the tenancy agreement any deposit paid should be repaid in full. Most RDG schemes identified through the survey did not involve an actual payment to the landlord. Instead, a formal commitment was made to the landlord to offer all or part of the deposit in the event of damage to the property, its furnishings or equipment.

Target groups

7.7 The target group for rent deposit scheme activities was most commonly single people or childless couples aged over 26. In most cases, such households would otherwise be treated as 'non-priority' with respect to the homelessness legislation as it currently stands. This contrasts with practice in England where there has been a growing tendency towards using RDG schemes to house family households who, if actually homeless, would be classed as in priority need ⁴⁴.

7.8 Case study LAs reported that their schemes also sometimes involved families - e.g. where the family had been assessed as an intentionally homeless household, or cases where the council had discharged its duty to a family by making a 'final' offer of a council tenancy, subsequently refused by the household (e.g. because of being in an 'unwanted area'). In East Dunbartonshire, the likelihood of rehousing family households through the scheme had recently increased due to a policy change which reduced the number of reasonable tenancy offers (of social housing) to which homeless households were entitled. Hence, it was expected that there would be an increased number of priority homeless families looking to access a private tenancy, having refused their 'final offer' of council housing.

7.9 In North Ayrshire it was reported that the scheme would accept family households declared 'intentionally homeless' following eviction for rent arrears. However, this would require a commitment to making regular payments towards former tenant arrears.

7.10 As reported through the national survey a number of authorities had recently made use of rent deposit schemes in providing temporary accommodation for large families requiring housing in areas where suitable (social rented) properties were in limited supply. It is understood that such households would expect to be offered a permanent social rented tenancy in due course.

7.11 Some councils expressed a desire to extend the use of rent deposit placements to 'priority homeless' households as a final discharge of duty. However, the current legislation was seen as deterring such practice. The Homelessness Code of Guidance (para 9.76) acknowledges that many private landlords will offer only Short Assured Tenancies and emphasizes that offering a tenancy of this type could not discharge a council's duty to provide a permanent tenancy. One national survey respondent believed that significant numbers of 'priority need' households would prefer a private tenancy, even on the poorer (Short Assured) tenancy terms usually applicable, as it would present an alternative to accepting a tenancy on a large social rented estate which is sometimes found unacceptable. As acknowledged above, under current legislation such an offer would fail to discharge a council's permanent rehousing duty to a priority homeless household even if it was made clear that the offer was being made on a purely voluntary basis (i.e. it could be refused without compromising the household's right to a subsequent offer of social housing). Nevertheless, as noted in footnote 13 ( Chapter 3) an authority can facilitate placements in private (Short Assured) tenancies in performing (as opposed to discharging) its statutory duties towards priority homeless households. In terms of the legislation, such a placement would be a form of 'temporary accommodation', with the authority being expected to make an offer of a permanent (social) tenancy in due course. In some cases, however, it might be expected that a household in circumstances of this kind would see it as preferable to remain in their existing home rather than accept such an offer (see para 7.37).

7.12 Targeting rent deposit schemes on people aged over 25 was mainly in recognition of the fact that Housing Benefit claimants aged under 26 are restricted in their claims by the Single Room Rent ( SRR) rules. Except, perhaps, in areas where bedsits are available SRR makes self-contained accommodation unaffordable for single people under 26, therefore making the tenancy unsustainable. Case study LAs however noted that, since the SRR does not apply to families, there was no reason for young adults with children to be excluded. It was also acknowledged that Discretionary Housing Payments ( DHPs) are an option for LAs looking to 'top up' Housing Benefit where SRR rates would otherwise make this unaffordable ( DHPs are further discussed below).

Scheme processes

Inward referrals

7.13 Case study evidence suggests most referrals to RDG schemes come from homelessness casework staff. In Renfrewshire and Stirling, however, it was reported that a proportion involved 'self-referrals' - with the implication that the people concerned would not have been processed and logged as homelessness presentations.

7.14 Inward referrals were normally subject to an initial interview to collect information about housing needs and preferences (e.g. on required property size and area) and to explain the purpose, rules and procedures of the scheme. Where support needs come to light this may have a bearing on whether the applicant is 'accepted onto the scheme' because (as in North Ayrshire and Renfrewshire) there is sometimes a view that private sector placements of 'vulnerable' households are generally to be avoided. In Stirling, on the other hand, it was reported that most applicants referred to the scheme had some form of support requirement. Whilst active drug use was seen as making an applicant unsuitable, other vulnerable applicants might be accepted whilst, at the same time, being referred for help to a specialist agency.

Identifying and checking suitable properties

7.15 The next stage of the process was matching 'accepted' applicants with potentially suitable tenancies. In the case study LAs RDG staff usually played an important role in this process through their contacts with local landlords. In North Ayrshire, for example, the Council made use of its growing database of private landlords being accumulated partly through monitoring advertised lettings in the local press. Other LAs were also actively developing registers of private landlords recognised as having acceptable management standards and willing to accept tenants on Housing Benefit. The scale of such activity has been enhanced following the introduction of landlord registration.

7.16 In addition to waiting to be notified of a potentially suitable vacancy by RDG scheme staff, RDG applicants themselves were often asked to look out for property advertisements and to ignore advertised restrictions such as 'No HB'. For example, North Ayrshire's RDG officer was willing to negotiate with private landlords on a client's behalf where this was an issue.

7.17 Housing quality was a concern for most RDG schemes and most LAs routinely inspect properties before facilitating the creation of a tenancy. Again, this is in line with the Code of Guidance which specifically recommends that arrangements with private landlords 'should be linked to minimum standards both in terms of the physical condition of the property and the tenancy agreements offered to tenants' ⁴⁵. Many LAs reported that landlords were required to produce valid gas and electricity safety certificates. Beyond this, however, it was not clear from the research exactly what criteria were used by LAs to judge whether a property was acceptable in terms of condition, facilities etc. One (non-case study) authority emphasised that although properties were checked, they would not necessarily conform to the standard of council housing. Service users, however, generally saw properties accessed through RDG schemes as of high quality. Similarly, the area choice afforded was appreciated (paras 9.50-9.51).

Affordability and Discretionary Housing Payments

7.18 Where an RDG applicant had been matched with a potentially suitable vacancy, it was standard practice for case study LAs to obtain a pre-tenancy determination ( PTD) to check whether Housing Benefit payable would match the quoted rent. In North Ayrshire, the RDG officer would negotiate for a more affordable rent where this was revealed as necessary through the PTD. Where there is a remaining gap between rent chargeable and standard HB payable RDG staff in some cases look to Discretionary Housing Payments ( DHPs) to bridge the gap. There is evidence that such help is appreciated by service users (see para 9.39).

7.19 DHPs can be paid to Housing Benefit claimants having difficulty in meeting a shortfall between their HB payment and their rent. There are no rigid rules about exactly who is entitled to such payments. Each LA Housing Benefit department is given a pot of money and they are allowed to decide who should be given the payments. They will usually take into account any special circumstances that contribute to the applicant's financial difficulties. Examples might include the applicant's need to pay:

• Child maintenance
• Legal costs
• Extra heating costs because of the applicant's need to spend a lot of time at home due to sickness or disability
• Additional travel costs because of the applicant's need to travel to a doctor or hospital or to provide care for a relative or friend.

7.20 The cost of DHPs is underwritten by central government through LA specific allowances ( DHP spending over and above these allowances would need to be funded by LAs themselves). Unpublished Department for Work & Pensions data shows that in 2005/06 the government contribution for DHPs in Scotland totalled just over £2M. However, the provisional (unaudited) figures show that only five authorities claimed their full allowance. Eight LAs claimed less than 50 per cent of allowances, leading to large sums being reclaimed by the Treasury. Some LAs, therefore, appear to be on rather weak ground in commenting that preventing homelessness through private sector placements is hampered by HB limits which make such tenancies unaffordable (particularly to those aged under 26).

7.21 North Ayrshire, Renfrewshire and Stirling Councils all made reference to helping applicants bid for DHPs where necessary. In North Ayrshire, for example, circumstances seen as particularly amenable to such treatment included cases where the high rent problem is temporary - e.g. where the applicant is approaching 26 (and, therefore, the end of SRR restrictions) or where the landlord will commit to rehousing the tenant into a lower rent property after a temporary stay in an 'expensive' dwelling.

7.22 Whether or not involving DHPs, RDG staff were reported as routinely assisting applicants to complete Housing Benefit applications. There was a recognition among RDG staff that rapid settlement of HB claims is essential in gaining and maintaining the confidence of landlords, thereby maximising the chances of their future willingness to accept RDG scheme referrals. Whilst formal 'fast tracking' arrangements were not mentioned, case study RDG staff actively monitored the progress of claims and were ready to intervene where necessary (e.g. in instances of delay resulting from a claimant's failure to supply requested information). In North Ayrshire it was seen as valuable that the RDG officer had previous experience of HB work, and that there was a designated 'homelessness officer' within the Council's HB team. In Stirling, this was facilitated by the officer having online access to the HB information system. It should be noted that such access is unlikely to be feasible for staff of voluntary agencies operating RDG schemes on behalf of LAs. This might be seen as an argument (albeit not a decisive one) in favour of internal rather than contracted out provision here.

Other assistance in the rehousing process

7.23 Other assistance reportedly made available to RDG applicants by case study LA staff included help to clients in:

• Producing a household inventory
• Setting up gas and electricity accounts
• Obtaining essential furniture (e.g. through Community Care grant applications)
• Managing debts.

It is clear from the service user interviews that such aid is not only often received but is also greatly valued by people seeking housing through rent deposit schemes. RDG staff were highly praised for their helpfulness by service user interviewees and it is clear from this testimony that trusting relationships are often developed (see paras 9.37-9.38).

Post-tenancy monitoring and intervention

7.24 The standard RDG service does not necessarily end at the point that a tenancy is agreed and the client moves in. Case study RDG staff took a considerable interest in the sustainment as well as the establishment of tenancies. In Renfrewshire, for example, post-allocation home visits were undertaken to check how clients were faring in their new home.

7.25 North Ayrshire Council saw itself as having a continuing responsibility to act for tenants previously rehoused into private tenancies with RDG assistance. This sometimes involved assisting tenants complaining about a landlord's failure to undertake necessary repairs. Ultimately, in cases of a landlord refusing to carry out essential repairs, the Council was prepared to rehouse a household elsewhere. More importantly, North Ayrshire monitored the sustainment of tenancies arranged with RDG support. The context for this was an ongoing expectation that landlords would notify the RDG officer if any difficulties cropped up which could threaten the tenancy. This appears to go beyond the specific 'Section 11' duties which landlords will have to meet in the future ⁴⁶, and can be seen as good practice in creating a framework where early notification of problems maximises the chances of the Council being able to intervene to avert homelessness actually occurring. In aggregate, the North Ayrshire monitoring data was reported as showing that most tenancies facilitated with RDG help remained intact for more than six months.

7.26 At the same time, a local authority's acceptance of some obligations in relation to private tenants housed with RDG help implies the ongoing accumulation of former homeless households 'on the books' of each RDG service. To the extent that services continue to be provided to such households in addition to the central task of assisting newly homeless households into tenancies, there is likely to be pressure to expand RDG staffing over time - even if the numbers of households being newly rehoused each year remain roughly constant. This may call into question the sustainability of such approaches.

Service scale and effectiveness

The impact of supply constraints

7.27 As briefly discussed in para 3.28, an overriding factor impacting on the potential of rent deposit schemes is the supply of suitable accommodation managed by landlords willing to participate. Some authorities responding in the national survey reported that it was often difficult to get landlords 'on board', especially in more affluent areas characterised by high demand for rented accommodation. Landlords operating in such areas were seen as having no difficulty finding tenants willing to pay high rents. This scenario was exemplified in the Western Isles survey response:

"There is a very limited private rented sector, which is in high demand. The landlords do not need the local authority to offer them deposits or find tenants. Often we find that landlords are able to 'cherry pick' tenants. This is an issue for young people in particular. We have written to every landlord in the Western Isles [to encourage involvement in the scheme] but only five out of a hundred responded."

7.28 Among the case study LAs, experience was highly varied in this respect. North Ayrshire and Renfrewshire reported having had no difficulties in finding sufficient numbers of landlords willing to participate in their schemes. Shortage of supply had presented no constraint to the expanding scale of schemes in these areas. (It was specifically noted in North Ayrshire that the recent nationwide influx of economic migrants from Eastern Europe had had no noticeable impact in terms of additional pressure on private rented housing). In East Dunbartonshire the picture was more finely balanced. Whilst the overall number of properties being made available was just sufficient to meet demand, it was sometimes difficult to rehouse people in more expensive parts of the authority.

7.29 Stirling, by contrast had found it very difficult to identify an adequate number of co-operative landlords. This was attributed, in part, to competition from university students. Another issue probably relevant in some other LAs, was the growing competition between the RDG scheme and the Council's own private sector leasing project to acquire privately owned dwellings as temporary accommodation for priority homeless households. In consequence of these factors, the numbers of tenancies arranged under Stirling's RDG scheme had been falling (see below) and a growing proportion of inward referrals were having to be referred elsewhere.

7.30 On the face of it, the contrasts between case study LAs as described above seem consistent with a hypothesis that there is greater scope for RDG schemes in predominantly urban areas with relatively weak housing markets and less scope in more expensive and/or rural areas.

Caseloads and outcomes

7.31 As noted above, almost all LAs reported operating RDG schemes. At the same time, however, the statistics cited in Chapter 3 suggest that such activity is usually on quite a small scale. Arrangement of a private tenancy was logged as a local authority 'last action' in respect of only 1,300 homeless presentations across Scotland in 2005/06. And if activity on the part of Edinburgh, Fife and Glasgow is excluded, the figure falls to less than 600 - representing well under two per cent of presentations involving the 29 authorities concerned.

7.32 It is accepted that some RDG activity may involve households not recorded (via HL1 returns) as having presented as homeless - see Chapter 3. Another issue may be that, in recording their 'last action' LAs are understating the scale of private tenancy placements by recording such cases in some other category (e.g. advice & assistance only). Such under-recording appeared to be true in respect of three of the four relevant case studies (see Table 7.1).

Table 7.1 - Private tenancies arranged by case study LAs, 2005/06

Sources: Case study LAs and Scottish Executive HL1 database. Note that 'internal record' figures for Renfrewshire and Stirling have been estimated on the basis of statistics provided by the case study LAs but which related to different time periods (e.g. calendar years).

7.33 In addition to the issues discussed above, there could be other 'legitimate' reasons for an apparent inconsistency between internal LARDG monitoring figures and HL1-derived figures. For example, the time periods may not match exactly: internal LA recording of RDG placements will probably be based on the date when a tenancy agreement is signed. The HL1 data refers to recorded homelessness presentations where cases were closed in 2005/06. Also, as noted in the footnote, the internal figures for Renfrewshire and Stirling are, in any case, estimates.

7.34 All of this suggests a need for the Scottish Executive's HL1 guidance to emphasize more strongly that the arrangement of private tenancies is fully reflected in the way that LAs record their 'last action' in respect of homelessness cases.

7.35 Irrespective of the possible understatement of activity via HL1 returns, the scale of activity as shown by Table 7.1 looks distinctly small in three of the four LAs. North Ayrshire is the exception here, with the Council reporting having established a total of 135 tenancies with RDG support since 2004. This compares with 37 tenancies recorded by Renfrewshire in the period September 2004-June 2006, 41 tenancies in East Dunbartonshire in 2004/05 and 2005/06, and 57 in Stirling since 2004.

Tenancy duration and sustainability

7.36 Research on LA homelessness prevention in England found that some councils require private landlords signing up to rent deposit-style services to commit to tenancies in excess of the six month minimum ⁴⁷. Whilst nothing of this kind was identified in Scotland, case study LAs noted a belief that a large proportion of tenancies initially agreed on a six-month basis were, in practice, extended beyond this term. Unfortunately, however, none of the case study authorities was able to substantiate this.

7.37 Half of the RDG service user interviewees saw the tenancy accessed with council help as representing a 'permanent' outcome. Indeed, at least one individual had been routed into their tenancy after having refused 'unacceptable' council properties (see paras 9.17-9.20). Half of RDG service users, however, saw the private sector as 'second best' and continued to hanker after a council tenancy (paras 9.61-9.62). This might have been inspired mainly by an appreciation that the latter would provide permanency in contrast to the insecurity of a Short Assured tenancy. Other motivations could relate to rent levels, perceived repairs service effectiveness or even the availability of the Right to Buy for council tenants.

Assessing 'success'

7.38 On a number of counts, the RDG schemes described above must be seen as generally successful forms of 'homelessness prevention'. Particularly in East Dunbartonshire and North Ayrshire, schemes were perceived as such by the local authority staff concerned. Not only are such schemes credited with helping significant numbers of homeless applicants access a tenancy, but it is believed that such tenancies are often sustained well beyond the initial six month terms available. Overwhelmingly positive testimony on the part of service users also contributes to a generally positive assessment of RDG schemes.

7.39 In assessing the success of RDG schemes a crucial consideration is the extent to which the help provided is decisive in enabling someone to avoid homelessness. To what extent is such help essential? Service user testimony in our view confirms that many of those concerned may well have lacked the necessary personal skills and knowledge to access a tenancy without such help (see para 9.56).

7.40 The broadly 'successful' story outlined above is, however, tempered by the evidence from Stirling that RDG schemes in some cases fail to live up to expectations. Here, increased competition for a limited number of private tenancy opportunities was seen as having seriously squeezed the Council's ability to procure properties for this purpose. In consequence, the numbers of RDG placements had recently dwindled to a very low level.

Service costs

7.41 Partly because of the lack of data on tenancy sustainment, the cost-effectiveness of RDG schemes is not easy to calculate. It is, however, relatively easy to estimate the costs of providing the service. Since guarantees are in practice rarely invoked, the vast bulk of service costs are staff salary costs. These are exemplified by North Ayrshire. In two years, there had been only four claims against the Rent Deposit Guarantee fund. The main costs, therefore, involved staff salaries. These totalled £57K annually. Allowing for overheads at 40% of salaries gives a total cost of £79.8K - or £1,150 for each of the 69 households recorded as having been rehoused under the scheme. It should be noted that these unit costs will be somewhat 'overstated' because they take no account of the fact that an element of staff time is accounted for by the provision of services to existing/former RDG service users (see para 7.25).

Chapter summary

7.42 In line with advice in the Homelessness Code of Guidance, almost all LAs operate rent deposit guarantee ( RDG) schemes to help homeless people access private tenancies. As well as providing a form of financial support, these schemes usually encompassed a range of services for clients referred. RDG schemes may be operated by in-house LA staff or by contracted external agencies. The latter approach can be beneficial but it has the disadvantage that non-council staff are likely to be restricted in their access to Housing Benefit information systems. Such access is sometimes crucial to success in this form of homelessness prevention as it enables staff to investigate and respond quickly to landlord concerns about 'delayed payments'.

7.43 Schemes were mainly targeted at non-priority homeless households involving adults aged over 25, though some also accommodated families who had been declared 'intentionally homeless' or who had refused their 'final offer' of social rented housing. Single Room Rent restrictions on HB payments were cited as the prime limitation on RDG schemes' ability to help young people aged 18-25.

7.44 Case study evidence suggests that, in arranging private sector rehousing, LAs typically check property conditions, as well as prospective rents. Where chargeable rents exceed amounts normally payable via Housing Benefit, LAs look to Discretionary Housing Payments to bridge the gap. However, despite a widespread awareness that HB limits constrain the potential scale of RDG schemes, some LAs substantially underspend their DHP allocations. In eight cases more than half of 2005/06 allocations remained unspent at year end.

7.45 In some case study LAs the service provided by RDG staff continued beyond the creation of tenancies. This could include representing the tenant's interest in disputes with landlords over outstanding repairs. One case study LA obliged landlords receiving referrals under its RDG scheme to notify the Council if the tenancy created was under any threat.

7.46 National homelessness monitoring data suggests the extent of RDG activity to be rather modest. Excluding three aberrant LAs, the number of 2005/06 homelessness cases where the council's 'last action' was facilitating a private tenancy offer was under 600 across the whole of Scotland (or less than two per cent of the homelessness cases handled by the 29 councils concerned). And although case study evidence suggests that such action may be somewhat under-recorded in ' HL1' returns, it would still appear that in most areas RDG activity remains quite small in scale. There is apparently a case for revised guidance to emphasize the need to avoid under-recording of RDG activity in HL1 returns.

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