Government urged to tackle ‘homelessness trap’ with rental deposit scheme

More people could be helped out of the “homelessness trap” if they were given similar help to get into the rental sector as first-time buyers receive to get on to the property ladder, according to charity Crisis.

The homelessness charity is calling for a rental deposit guarantee scheme to be set up across England, to ease landlords’ fears that letting properties to people who have been homeless is too risky.

More than eight in 10 (82%) private landlords across England are unwilling to rent to homeless people, according to research for Crisis.

The survey of more than 800 landlords found their main concerns were that people who have been homeless pose a greater risk of rent arrears and that they were worried their property would need to be more intensively managed.

Crisis has launched a campaign called Home: No Less Will Do – calling for stronger action across England to help homeless people secure a home to rent.

The campaign calls on the Government to extend similar support offered to first-time buyers to homeless people looking to rent.

A wave of schemes has been launched to give people a helping hand on to the property ladder, with a range of help enabling people to build the necessary deposit to buy a home and meet mortgage lenders’ requirements on offer under the Government’s flagship Help to Buy scheme.

Jon Sparkes, chief executive of Crisis, said: “We need action to tackle this homelessness trap…

“The Government already helps first-time buyers struggling for a deposit; it’s only fair they extend this help to those who need it most.”

Crisis is urging the Government to set up and underwrite a deposit guarantee scheme to help homeless people overcome the hurdles of finding large amounts of cash up-front in order to rent privately.

The suggested deposit guarantee scheme could be used in place of a cash deposit on a rental property and it would reassure landlords that they could draw on the deposit funds from the scheme if the property was damaged or the tenant fell into arrears, Crisis said.

It said a quality mark should also be introduced for projects that support homeless people and landlords.

The campaign is backed by landlords’ groups.

Chris Norris, head of policy, public affairs and research at the National Landlords Association, said: “It’s a win-win situation: a homeless person finds a stable place to live and the landlord finds a tenant who wants to stay and make the house their home. That’s why we’re backing this campaign and calling on the Government to take action.”

David Smith, policy director at the Residential Landlords Association, said: “It is expensive and time-consuming for a landlord to find a new tenant and most landlords will do all they can to keep tenants in their homes rather than face an empty property. Many landlords would be much less reluctant to rent to people who were homeless if the risks could be better managed.”

A Department for Communities and Local Government (DCLG) spokesman said: “One person without a home is one too many, which is why we are increasing central funding to tackle homelessness over the next four years to £139 million.

“The Government has funded Crisis to help nearly 9,000 single homeless people into sustainable private rented sector accommodation through a £14 million programme.

“However, we are clear that there is more to do to prevent and tackle homelessness and we will look at the recommendations of this report with interest.”

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