Capital Letters is making a difference to homelessness in London, finds independent review

Capital Letters is making a difference to homelessness in London, finds independent review

11th November 2021

There is growing evidence that Capital Letters is making a positive impact on homelessness, according to an independent review by LSE London.

Capital Letters was set up in 2019 by a group of London councils to enable more families to access affordable homes in the private rented sector (PRS). The councils have pooled their property procurement capacity, and Capital Letters now has 21 members covering two-thirds of the boroughs in London. 

By August 2021, Capital Letters had offered over 7500 properties to London councils since its launch and the LSE report notes that the pace of procurement had increased significantly over the last six months.  

Two-thirds (67%) of families renting through Capital Letters were housed in-borough, compared to 41% for London as a whole, according to the latest Inter-Borough Accommodation Agreement figures. 

Capital Letters works with private landlords in London to find properties at local housing allowance (LHA) rates so families can move out of temporary accommodation or avoid homelessness. It also provides a tenancy sustainment service once the property is let to support both tenants and landlords to ensure the tenancy is successful. As a non-profit company, Capital Letters was set up to disrupt the private rental market and increase access to good quality PRS homes for families on benefits.  

“The potential for increasing the proportion of households who can be offered an assured shorthold tenancy (AST) in this way is clearly a major reason for Capital Letters’ existence. Its progress especially over the last six months suggests that the potential benefits are increasingly being realised,” conclude the LSE team, led by housing economics expert, Professor Christine Whitehead. 

The LSE report highlights a potential saving of £4,000 per property over two years compared to the costs of housing a family in temporary accommodation.  

“The more boroughs that become active members, the more value comes from the pan-London agreements on standardised incentive payments to landlords and on quality standards. In addition, a reduction in inter-borough competition strengthens Capital Letters’ capacity to negotiate, reduces costs and increases supply.” 

As well as finding properties for boroughs, Capital Letters also offers a tenancy sustainment service to both families and landlords, including help with benefit claims and maximising household income to improve affordability. By the end of August, the company has secured over £650,000 in benefits and grants for families since the start of 2021. 

Capital Letters evaluates the success of the tenancy sustainment service through two key measures: the income accessed on behalf of families, and the number of tenancies maintained.  

“The numbers of evictions are tiny in relation to the number of tenancies created, although there is a recognition that numbers may increase as the eviction pause is lifted over time,” says the report. “Positive feedback from landlords provides further justification for the team’s activities.” 

Of the 400 tenants housed through Capital Letters who are nearing the end of their two-year AST, so far only six were identified as at risk of eviction in the LSE report. 

Jackie Odunoye, Chair of the Capital Letters board, said: 

“Despite the impact of Covid on the private rented market in London, this review shows that Capital Letters is making a real positive difference to families at risk of homelessness with more able to find secure and settled homes.  

“We are determined to increase significantly the number of properties we offer our member councils and provide support to families and landlords to ensure the tenancy is a success.” 

Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said:  

“Capital Letters is a key part of the boroughs’ pan-London approach. Through working together, we are strengthening our market position and securing better housing options for homeless households. But we’re always determined to learn and adapt depending on what works best, and this report will certainly be useful for guiding the future development of Capital Letters and our joint efforts.” 

Laurence Coaker, head of housing needs at Brent Council and a member of the Capital Letters board, said:  

“The LSE report highlights that the jewel in the crown of Capital Letters is the tenancy sustainment service which supports both tenants and landlords – something that no other service provider does. This is key to persuading landlords to let to tenants on low incomes.” 

Mark Meehan, chief housing officer at Hammersmith and Fulham council and chair of the pan-London needs and homeless group, said: 

“Homelessness is predicted to get worse in London, particularly for families, as the impact of the Covid pandemic and the eviction pause is realised. Last year we showed what we can achieve when London councils work together and now this report evidences that our partnership led by Capital Letters has improved outcomes for homeless families.” 

Jeff Crudgington of Cot Estates, which has let over 60 properties through Capital Letters, said:  

“We work with Capital Letters whenever we can because it’s easier and we have access to tenants across London. We have developed our LHA-rate letting service because Capital Letters has made it possible and they are having a real impact on this part of the market.” 

DOWNLOAD THE FULL REPORT HERE.  

Notes 

  • The London School of Economics established LSE London as a centre of research excellence on the economic and social issues of the London region, including housing, finance and governance. LSE London was commissioned to produce an independent evaluation of Capital Letters after its first 18 months of operation.  
  • Capital Letters was set up with support by London Councils to improve collaboration between boroughs and reduce competition for properties. The government funds Capital Letters as part of its commitment to reducing homelessness via the Department for Levelling Up, Housing and Communities. 
  • The following London boroughs are members of Capital Letters: Barking & Dagenham; Brent; Camden; Croydon; Ealing; Enfield; Hackney; Hammersmith & Fulham; Haringey; Harrow; Havering; Lewisham; Newham; Redbridge; Tower Hamlets; Waltham Forest and Westminster. Greenwich and Merton are the latest councils to join and are currently onboarding. Bexley and Southwark are full members but not currently active.  

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