capitalletters, Author at Capital Letters

The Government has confirmed funding of £14.1m for Capital Letters for a further two years, showing its continuing commitment to tackling family homelessness in London and Capital Letters.

Eddie Hughes, Minister for Rough Sleeping and Housing, announced the grant renewal at a Capital Letters conference today (6 July 2022), when he underlined the not-for-profit company’s role in the government strategy to tackle family homelessness.

Around 4000 homeless families have found homes in the private rented sector through Capital Letters since it procured the first property three years ago.

By working collectively through Capital Letters, the member councils have access to more properties across London, enabling them to house more families and make savings on their homelessness costs. An independent review of Capital Letters by the London School of Economics in 2021 highlighted the £15,000 a year cost of maintaining a family in temporary accommodation.

Raising standards in the private rented sector

With social and affordable housing in short supply in London, councils have been finding an increasing proportion of the homes they need to house families in the private rented sector. Capital Letters ensures that these properties meet the quality and safety standards agreed by the councils, which will be essential after the decent homes standard applies to the private rented sector.

Sue Coulson, Chief Executive of Capital Letters, said:

“By working collectively with Capital Letters, our member councils are driving up standards in the PRS, reducing costs, and increasing the supply of affordable homes for homeless families across London. We are improving the experience for both tenants and landlords, with the private rented sector as a key element of members’ homelessness reduction strategies.”

“As more London councils join Capital Letters, collectively we have a greater influence on the housing market. Landlords have easy access to tenants from councils across London, while councils can significantly reduce the cost of homelessness provision. Together we are creating more opportunities for more families to move out of temporary accommodation and settle into a secure and safe home.”

Tenancy sustainment service supports new tenants

Capital Letters also provides a free tenancy sustainment service for both tenants and landlords to ensure the tenancy has the best chance of success, including helping with new benefit claims, setting up utilities and sign-posting households to other services.

Around 80% of the families housed in a property secured through Capital Letters accept the offer of support; in 2021/22 the company secured over £750,000 for 300 families through grants and back-dated benefits.

Capital Letters is now developing new services to increase housing supply and making letting to families referred by councils more attractive to private landlords. Planned services include rent collection and protection, bonds and property management, which reduces the risk of arrears and reassures landlords that their property is looked after.

The company is developing independent sources of income to replace the current grant when it ceases in 2024 to ensure that services for homeless families continue long-term. Capital Letters is negotiating with property portfolio investors and intends to become a landlord itself, supplying more PRS properties for member boroughs.

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

“Capital Letters is a crucial part of boroughs’ pan-London approach to tackling the homelessness crisis.

“Since its launch, Capital Letters has improved boroughs’ access to accommodation options and – most importantly – secured better outcomes for the homeless Londoners who rely on us for housing help.

“We’re pleased the government is continuing its funding support for Capital Letters. This is important recognition of Capital Letters’ impact and a valuable boost to boroughs’ collaborative work in support of homeless Londoners.”

Our statement about the Government white paper, A New Deal for Private Renters, published by the Department of Levelling Up, Housing and Communities on 16 June 2022.

Sue Coulson, Chief Executive, said:

“Capital Letters welcomes the publication of the Fairer Private Rented Sector White Paper, which will lead to the end of no-fault evictions and finally make “no DSS” discrimination illegal.

“For too long vulnerable tenants at risk of homeless have been unfairly treated by a few bad landlords in the private rented sector. They have been prevented from renting simply because they are on low incomes and claim benefits. Or, when they do find a home, they do not feel secure in their home because of the threat of eviction if they complain about sub-standard accommodation.

“The white paper shows that the government is serious about ending the unfair treatment of tenants, and we look forward to supporting the development and implementation of the proposed new policies.

“We will continue to work with the majority of responsible landlords so more families can move out of temporary accommodation or avoid the stress of insecure or unsuitable accommodation by finding good quality homes in the private rented sector.”

Capital Letters was set up in response to London’s homelessness crisis. We find private rented properties so families can move out of temporary accommodation or avoid being made homeless. Capital Letters is owned by two-thirds of the councils in London and is funded by the government.

You know there’s a problem in the private rented sector when letting agents start talking about the unaffordability of properties for their prospective tenants.

Agency chain Hamptons recently released research that sounded the alarm that households are about to be hit by ballooning energy bills and other cost of living increases.

Generally, agents can be relied on to talk up the market to their clients. Could Hamptons be hinting to landlords that they should lower their expectations? The ongoing demand for properties in London suggests not. But perhaps we are nearing the limit of what tenants can afford.

Homeless charities have long highlighted the affordability gap for low-income families who spend a disproportionate amount of their household income on rent. Consumer champion Martin Lewis, the money-saving expert, has also sounded the alarm on the impact of rising energy bills and the cost of living.

Ironically, London renters may not feel the impact of bigger bills because their rent is already so high! In percentage terms, a jump in energy bills will have less impact on their overall cost of living.

Nonetheless, London tenants are set to spend 55% of their household income on rent and bills in 2022. For households on very low incomes, paying over half your income on rent simply does not leave enough to live on.

As readers of this blog will know, councils are increasingly turning to selective licensing schemes in parts of their boroughs. They tend to licence areas with a high proportion of households claiming benefits so if your properties are in selective licence areas, your tenants are more likely to be affected.

So what can be done about the problem Hamptons has highlighted?

Capital Letters was set up to find private rented properties for people on the edge of affordability. These are the ones that councils have a legal duty to house such as families in temporary accommodation or facing homelessness.

As demand for properties continues to outstrip supply, finding properties at LHA rates, the proxy for affordability, was already challenging. Nonetheless, many landlords have developed sound businesses by letting some or all their property portfolio to families claiming benefits.

Our one-stop service focuses on taking the hassle and risk out of letting to tenants in the benefits system. We offer landlords upfront incentive payments and help both landlords and tenants navigate the benefits system.

We generally succeed in preventing tenancies from failing by ensuring benefits claims are completed correctly at the start of the tenancy and helping set up utilities and rent payments.

Looking ahead to a tough year for some tenants, more active support may be needed to help families on low incomes or benefits bridge the affordability gap. Our tenancy sustainment team already respond quickly to the warning signs of a tenancy in trouble. We will be even more alert in the current challenging environment.

Recent research by York University found that landlords letting to low-income families used active tenancy support to reduce the risk of arrears. Others recognised they did not have the time or skills, and use intermediaries such as Capital Letters to support tenancies.

We think that as affordability pressures increase on households on low incomes, some form of active tenancy support will become even more essential as the rising cost of living squeezes households.

Capital Letters is ready to help, but one way or another, landlords will have to find ways to support tenancies to ensure they are successful.

The debate about who and where is being levelled up started in earnest when the Government published its white paper, including a pledge to get private rented houses in order.

The government press release contained pledges related to the private rented sector, though we need to wait for another white paper on renters reform to see the detail.

However we know enough to applaud the commitment to reducing the number of homes in the PRS that fail the decent homes standard.

The proportion of PRS homes that don’t meet the standard halved over the last decade and the government has pledged to halve it again by 2030. This is good news. The landlord sector has done a lot to improve standards but the promised crackdown on bad landlords is necessary.

Nearly a quarter of properties in the PRS do not meet the decent homes standard. Households receiving benefits who have fewer housing options are most likely to live in sub-standard homes.

London councillors and parliamentarians have been quick to point out that levelling up isn’t a north-south issue. There are 165,000 Londoners in temporary accommodation, which accounts for two-thirds of the total in England. These households, many with children, need levelling up too, say a London Councils and London MPs.

Capital Letters was created by councils in London to find private rented properties so families could move out of temporary accommodation. Finding properties at local housing allowance rates remains challenging as the privately rented market becomes more buoyant.

The latest government homelessness figures released last week showed that the private rented sector is now providing housing for proportionally more families at risk of homelessness.

The PRS has grown steadily over recent times; we need it to play a larger role in offering homes to families who are either in temporary accommodation or at risk of homelessness.

In 2019, social housing accounted for about 60% of discharges of main duty by councils in London with that number already starting to fall before the pandemic. By autumn last year, less than half (46%) of discharges were to social housing, while the use of the PRS nearly doubled to about 30% of discharges of main duty.

To meet the government’s objective of improving standards in the PRS while reducing the alarming numbers of people in temporary accommodation, particularly in London, requires collaboration with private landlords, councils and the government.

The recent National Audit Office report on private renting concluded that government must do more to support local authorities determined to improve standards in their area. The next white paper will need show how this can be done, including the expected national landlord register.

In fact, Capital Letters only accepts properties that meet the higher quality and safety criteria demanded of our member councils. We work with landlords who provide good quality properties – so families have a safe and secure home to put down roots. There just needs to be more of them.