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News: Landlord group repeats call for upfront cash payments

Thu, 22 Apr 21

The National Residential Landlords Association has repeated its backing for upfront cash payments and rent guarantees.

A new study has found that such payments and guarantees are the most effective way of opening up the private rental sector to tenants in receipt of Universal Credit. 

NRLA chief executive Ben Beadle says: “The private rented sector can play a valuable role in providing longer term accommodation for those at risk of homelessness or struggling to maintain a tenancy. 

“It is vital that policymakers heed the findings of this research to engage with landlords effectively and ensure they are confident that any risks they perceive will be addressed.”

Beadle continues: “The central element for landlords is continued rent payments. Government holds the key to this, through continuing to link local housing allowance to market rents, improving the administration of Universal Credit and better utilising guaranteed rent schemes at a local level. 

“Without taking these vital steps, the government will not tackle the homelessness crisis.”

The study - by the Centre for Homelessness impact and the Behavioural Insights Team as well as the NRLA - shows rent guarantees and upfront payments had the greatest positive impact on landlords.

Recent government figures show a doubling of UC recipients from 3m people in March 2020 to 6m today which has made finding solutions that work for tenants and private landlords more urgent.

The centrepiece of the study was an online trial involving more than 2,700 landlords across England and Wales. 

Each participant was asked about different scenarios to understand how they would react and respond, across two broad areas.

One area related to whether disclosing additional information about a tenant has any impact on increasing landlord willingness to continue with the application of someone receiving UC. 

To this end, landlords were sent information on:

- Pre-tenancy training: A certificate of completion and schedule for a tenancy skills programme

- Budget planner: A table of the tenant's income & expenditure

- Alternative payment arrangement leaflet: Information about APA, which is the process in England whereby housing benefit is transferred directly to the landlord (as opposed to being paid as part of the lump sum UC payment to the tenant).

The second area related to which Local Authority incentives or support programmes are most effective at increasing landlord willingness to rent to someone receiving UC, considering:

- £1,000 cash upfront: a cash payment upon signing a tenancy agreement;

- rent guarantee: a written guarantee from the Local Authority that they will cover late or unpaid rent;

- deposit bond: a cash amount equivalent to one month's rent set aside to cover any costs a landlord may incur during the course of the tenancy;

- support from a landlord liaison officer: a dedicated resource that acts as a single point of contact for private landlords who need support with a tenancy.

Landlords who received information about budget planners, pre-tenancy training or APA reported very similar willingness to rent to potential tenants as those who received no additional information. “This suggests that these are less effective at changing landlords’ attitudes than previously expected” say the report authors.

Rent guarantees and upfront payments were more persuasive but even then the authors admit enthusiasm amongst landlords was muted.

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