Private Renting: Homeless and Vulnerable People

Dan Poulter Excerpts

Wednesday 8th February 2017 Westminster Hall

[Richard Benyon]

I recognise that that is a problem. If the hon. Lady will allow me, I will come on to talk about that. If I do not, I am sure she will intervene again. I very much want to talk about the variety of different factors that influence homelessness.

I want to tell the Minister about two potential solutions that may be of help. A lot of work on this has been done by the homelessness charity Crisis, which I cannot praise enough. It is totally focused on outcomes, working with us, whatever side of the House we sit on, to try to find solutions that work. There is nothing particularly new in the two schemes I am proposing, and they will be familiar to some. The first is a help to rent scheme and the second is a national rent deposit guarantee scheme.

WPI Economics developed a model to assess the cost-benefits of the services over a three-year period and identified that £31 million would be required per annum over that period. That would be made up of £6.7 million for the rent deposit guarantee scheme and £24.1 million for a help to rent project. In a time of cash-strapped Treasury forecasts, I want to show—if the Treasury is listening—that this makes economic sense, because it will reduce the cost of the burden of homelessness that sits on the taxpayer.

From 2010 to 2014, Crisis, with funding from the Department for Communities and Local Government, ran the private rented sector access development programme, which funded specific help to rent schemes across the country, which helped homeless and vulnerable people access affordable and secure accommodation in the private rented sector. I have seen that work in my constituency in a different scheme run by the Two Saints hostel in Newbury, which moves people from the wayfarer beds and being the huddled figures in the doorway I described earlier through to supported accommodation and then on to independent living. That works only because all the complex problems that we know exist in homelessness, particularly in rough sleeping—mental illness, relationship breakdown and alcohol and drug abuse—are dealt with throughout the process, which allows a sustainable solution to each individual’s problems.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

I congratulate my hon. Friend on securing the debate. I agree with many of the points he has made. However, those people with chronic and enduring mental ill health find it very difficult to access any suitable social housing accommodation, particularly in big cities. That group has been let down badly by the private sector and I am not sure whether the solutions he is proposing will change that, given that those people are often going in and out of mental health hospitals. What thoughts does he have on helping that particularly vulnerable group?

[Richard Benyon]

Mental health problems can cause homelessness and homelessness can cause mental health problems. In this place we think of things only in silos. We have a very good Minister here from one Department, but if we really are to deal with this problem we ought to have a whole range of Ministers from the Department of Health, the Ministry of Defence and people from all the organisations who care for people sitting down on the equivalent of the Treasury Bench here so that we can do so in in a much more cohesive way.

The schemes I have been talking about matched tenants with landlords and provided financial guarantees for deposits and rent, with ongoing support for both parties. They provided the landlord with a deposit and insurance throughout the tenancy were problems to arise. They also offered the tenant training in budgeting and help to gain and sustain employment. During the programme, more than 8,000 tenancies were created with a 90% sustainment rate, which is an incredible achievement.

Another person we should have here is an Education Minister. One statistic I find fascinating is from the Centre for Social Justice, which showed that while the national average of educational attainment is that 60% achieve five A* to C grades at GCSE, the figure is only 27% among those who have to move more than three times during their secondary school education. We can therefore see the knock-on problems caused by people having to move frequently, and that sustainability in one home is so important.

The schemes also saved the Government money. In just three months of operation, 92 schemes saved almost £14,000 in non-housing costs. The schemes created homes for those who need them most and helped some of the most vulnerable navigate a complex market. With the security of a home and the floating support from a help to rent scheme, a vulnerable person is less likely to need assistance from other services. That is a point that my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) will appreciate. Schemes varying in geography and specialisms still exist, yet without the funding they need they are unable to deliver all the services they would like to the number of people who need them. By working with landlords, such schemes have the potential to unlock the supply of private rented sector properties, which could particularly benefit areas where housing demand is highest. Local authorities could also incentivise good practice through the schemes as well as eliminate bad practice through enforcement policies.

Crisis is also calling for the second project I want to touch on: a national rent deposit guarantee scheme. To reduce up-front costs, help to rent schemes often offer bonds or guarantees to landlords in place of deposits, which cover certain types of costs that the landlord may incur at the end of a tenancy including damages and, in some cases, rent arrears. That was the case in the example from my constituency that I outlined earlier, where private sector landlords were demanding six months’ rent in advance. That means that vital funds are tied up in admin costs and reserves in case those guarantees are called in rather than in going into funding the support that helps vulnerable tenants sustain their tenancies. If the Government established a national rent deposit guarantee scheme, that would provide help to rent projects with greater financial security, with landlords safe in the knowledge that their property is protected and that the help to rent projects are providing the right support to help tenants maintain rent.

Crisis has found claims on bonds by existing schemes to be relatively low, within the 15% to 20% margin. That is one of the reasons why the schemes are attractive to the private sector trade bodies. It seems only fair that, along with help to buy, there is a similar scheme to help those who are just about managing and for whom purchasing a home is just not realistic. Crucially, both the Residential Landlords Association and the National Landlords Association support those asks of the Government.

Currently, schemes attract landlords through the development of a suite of services to mitigate the risks associated with letting to a vulnerable or homeless person or family. We could, and should, actively encourage more landlords to view working with those schemes as an effective business model. The moral argument aside, there are fiscal incentives to working with such schemes. For example, a targeted intervention by a scheme and a national rent deposit guarantee reduces the financial risks for landlords. Also, clients using the access support who have a history of homelessness are much more likely to be deemed vulnerable under universal credit and therefore they should be offered universal credit direct payments for a limited period, which landlords may welcome. I think that goes a little of the way to addressing the concerns of the hon. Member for Mitcham and Morden (Siobhain McDonagh).

Help to rent schemes give landlords a layer of security that they do not currently receive from letting agents or the local authority. Such interventions could significantly increase the landlord’s confidence to let to this vulnerable sector or to those in housing need, and that could be part of an agreed longer-term tenancy. Among landlords with experience of letting to homeless people, 59% said they would consider letting to homeless households only if that were backed by such interventions. I therefore believe that the rationale for Government is clear to see. These policies are cost-effective schemes that will provide stability in the private rented sector for the most vulnerable, helping to prevent and tackle homelessness. Investment in the private rented sector access support would build on the Government’s recent announcement for homelessness prevention trailblazers and the Prime Minister’s welcome commitment to put prevention at the heart of a new approach.

Government investment has the potential to reduce spending on temporary accommodation and the costs of rough sleeping. This would allow cash-strapped local authorities, such as mine in West Berkshire, to allocate more of their homelessness budget in a more targeted way—for example, West Berkshire Council continuing to support the mental health triage service, which is doing great work. Independent analysis commissioned by Crisis estimates that if access were available to all households approaching their local authority for homelessness assistance, some 32,000 people could receive support annually. The model assumed that if 60% of people leave temporary accommodation as a result of the scheme being available, savings amounting to between £175 million and £595 million could be realised from one year of the scheme.

Investing in the private rented sector access support fits with the Government’s wider agenda on universal credit and homelessness prevention. I was pleased to support the Bill promoted by my hon. Friend the Member for Harrow East (Bob Blackman) and will continue to do so. It will make a difference. My worry is that unless parallel schemes, such as those I have outlined, are introduced and accompany a review of the impact of the freeze on local housing allowances in certain areas, we could get into the mad situation where inadvertent actions by the Government create one problem on the one hand that my hon. Friend’s Bill has to solve on the other. I am pleased that the Prime Minister has made housing a priority in her wish to lead a Government that help those people left behind who have not benefited from recent economic growth. The White Paper is an important indication of that intent. I suggest to the Minister that here are two possible schemes that would work and put the private rental sector at the heart of achieving the Government’s ambitions.

--- Later in debate ---

[Siobhain McDonagh]

I have a controversial view on the prevention of homelessness Bill. I believe that it is a sticking plaster and does not resolve the problem. It simply puts more demand on local authorities, which cannot cope with what they have at the moment. At the heart of the matter is supply. At the heart of it is control, whether that is control over how much rent people have to pay, some control over landlords who are not prepared to maintain their properties or some control in terms of security of tenure. Unless those things are addressed, and addressed in numbers, the problem will not be resolved.

What are we doing to the children who find themselves in this position, who find themselves moving year on year, or six months on six months? These are kids who do well at school and want to be ambitious at school, but who never know or never experience the simple security of living in the same place for a reasonable length of time. That is life for people in my constituency, and the scary thing is that it is life for an ever growing proportion of people, not just people in poor, low-paid work—

[Dr Poulter]

Will the hon. Lady give way?

[Siobhain McDonagh]

I will not.

Increasingly, that is life for people in middle-class jobs who simply cannot get on the housing ladder and cannot rent something that is in any way affordable.

When the White Paper was presented to the House yesterday, the Minister talked of families for whom rent is 50% of their income. I regularly see working families whose rent is 200% of their family income. We have a crisis. I realise that everyone wants to speak and I do not want to prevent anyone from speaking. It is about time that we stopped pussyfooting around. We have to build homes that people can afford. Anything else does not address the issue.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I will try to limit my remarks, because I am acutely aware that the right hon. Member for East Ham (Stephen Timms) wants to speak.

I have been very interested in this issue since I was at school in the constituency of the father of my hon. Friend the Member for Newbury (Richard Benyon) in the 1970s. I congratulate my hon. Friend on securing the debate. I did a lot of work talking to some people who were living in very damp accommodation. It was very important that we got them moved and got the house condemned as well. If we can actually sort out some of the homelessness issues, it is very important to ensure that people move into properties that are dry and acceptable, rather than, frankly, in an appallingly bad state.

When I was living in London full time, apart from making visits down to my constituency in Plymouth, I went to church at the Savoy chapel, which is in the heart of London, and the chaplain told an horrendous story about how, if someone is homeless, they feel dirty, no one talks to them and everything is all very difficult indeed. We have to take some action to try to deal with that.

My constituency of Plymouth, Sutton is an inner-city seat. It is south of the A38, running from the River Plym to the River Tamar, and has a significant level of deprivation, as evidenced by the 11 or 12-year life expectancy difference between the north-east of the constituency and the south-west, around Devonport. That is a very big issue, and we have to do something about it, and it is not helped by people being homeless. I am delighted that we have a hostel in my patch, where a lot of the homeless end up going, but I am appalled that the national health service has decided to close one of the GP surgeries in my constituency that deals with homeless people who live in that kind of hostel accommodation.

[Dr Poulter]

I was particularly distressed to read about that in my hon. Friend’s local paper because I think I opened that GP surgery for him. However, the point is that hostels are not the answer to the problem, particularly for vulnerable people with mental illness, because they need to be properly housed, and they are not being properly housed due to a lack of housing supply, particularly in the social sector. Hostels must not be—and are not—the answer.

[Oliver Colvile]

I thank my hon. Friend for that intervention. However, it is better for someone to be living in dry conditions than on the streets, and I think that is important.