Real Estate

It’s time private landlords took a wider role in providing social housing

This winter will be a perfect storm for homelessness in the UK, as rising rents, energy and food prices, combined with the end of several government support initiatives, including the universal credit uplift and the furlough scheme.

For households already in arrears from Covid-19, and Citizens Advice believe that half a million more renters have gone into arrears since the first lockdown in 2020, the next few months and years could be when the true impact of the pandemic is finally felt.

Even before Covid, however, the UK was already facing a significant homelessness problem.

The government, in collaboration with local council and not-for-profit organisations, rallied during the pandemic to provide temporary emergency relief for frontline homelessness.

The Big Issue believes it is significantly cheaper to prevent homelessness proactively than to let it spiral, yet while the weight of responsibility still largely falls on the public sector to do so, it is the UK private sector that is now largely responsible for social housing.

In fact, privately-run housing associations have provided the majority of social homes since they outstripped local councils for the first time in 2008.

And private landlords, while benefitting from Right to Buy policies which saw socially rented properties move into private hands, have also increased their share over the years, largely due to the ongoing undersupply and underfunding of social rental housing.

Doubled in size

Since the high of 2003, homeownership in the UK has fallen from 71% to 64%, and the private rental market has doubled in size in that time, with this type of housing being particularly common in cities, for lower-income households and young adults.

It is why there must be more collaboration between the public and the private sector if we are going to tackle the upcoming homelessness crisis, whether that be homelessness via domestic violence, rough sleeping, substance misuse or no-fault evictions.

For several reasons, housing supply in the UK is incredibly unresponsive to demand: construction faces an affordability issue, while demand for social housing always outstrips supply as prices are kept significantly below the market level. It is therefore up to us to focus on how existing stock can be better utilised.

The majority of social homes in the UK are now provided by private, non-profit organizations that offer low-cost housing for those in need of a home, but private landlords and investors can still play a larger role.

Guaranteed rent

If you’re a landlord, using your property for social housing means you still benefit from a guaranteed rental income at market value from housing providers, paid each and every month, even if the property is empty.

It also comes without all the normal stresses involved with renting a property, and a fully managed service that includes regular property inspections at no extra cost.

Providing low-cost transitional housing in this way can provide additional income to landlords with long-lease agreement of up to five years.

It also gives landlords the opportunity to become part of the solution, and to make a positive social impact with their properties.

Homelessness takes many forms and the people companies like Lotus Sanctuary often help are not often who you’d expect to be homeless.

Domestic abuse

For example, 61% of homeless females in the UK are victims of domestic abuse or violence and Parliament believes this problem, while typically difficult to measure, rose exponentially in lockdown with evidence that cases are escalating in seriousness and complexity, with Dame Vera Baird referring to it as the “epidemic within the pandemic.”

Safe accommodation is needed for these victims but is not always able to be provided by local council, especially if you consider this means being housed in the same area as your perpetrator.

This is just one example of where private landlords can step in, move quickly, and be able to assist people who need urgent accommodation. With more access to housing the private and public sectors can work together to the benefit of each other, as well as those who need it.

Gurpaal Judge is the founder and CEO of Lotus Sanctuary, a community-interest company on a mission to house and empower vulnerable people facing homelessness.

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