Barnet Council Direct Let Scheme
For landlords wanting to let their vacant properties quickly within Barnet, direct letting schemes offered by Let 2 Barnet could be a sensible choice.
In a nutshell, the Barnet Council Direct Let Scheme (DLS), enables landlords to let their properties directly, via the Council, to tenants who are homeless or otherwise in urgent need of accommodation. All of these prospective tenants’ have attended the local council to obtain assistance with their housing situation, and so by enlisting on the ‘Direct Let’ scheme, landlords will be providing local people with much-needed assistance with their accommodation.
All tenants are vetted by the Council to ensure they meet the legal ‘Homeless’ qualification criteria:-
- The tenant must be legally classified as “homeless”;
- The tenant must be ‘in priority need’ of accommodation;
- The tenant must be found to be eligible for housing assistance.
The DLS scheme is available to all landlords with suitable properties to rent and there is no cost involved with enrolling. Let 2 Barnet will also pay landlords an attractive cash incentive upfront to encourage participation in the scheme, which can provide substantial peace of mind to landlords. Provided the property is in a habitable condition and meets all the council’s requirements and standards for housing, it will be accepted onto their scheme. Generally speaking, properties need to be clean and secure, in a reasonable state of repair, with reasonably modern facilities and services and should also meet all relevant health and safety standards (e.g. up-to-date gas and electrical safety certificates and EPC’s will be required by Councils).
Once the property is deemed acceptable and Let 2 Barnet has nominated a suitable tenant, this tenant will then enter an assured shorthold tenancy agreement and rent the property privately from you, the landlord.
Benefits of the Direct Let scheme (DLS)
Private landlords normally request at least a months’ rent in advance in addition to a security deposit, but those who are homeless or on low income and/or benefits can struggle to meet these payments. Therefore, in order to ensure landlords still receive rent and applicants can still find housing, Let 2 Barnet will offer a deposit guarantee letter on behalf of the tenant. This offers you financial protection as a landlord and there are also a number of other benefits to this service:-
- Let 2 Barnet won’t take any fees or commission, so your cash flow is unaffected;
- Research has shown that local housing allowance (LHA) tenants tend to stay longer than those who aren’t in receipt of LHA, resulting in lower turnover of tenants and less costly voids and associated hassle for you;
- The deposit guarantee issued by Let 2 Barnet offers financial peace of mind;
- Let 2 Barnet may offer a one-off non-refundable payment as an incentive to let your property on this scheme;
- The Let 2 Barnet team will liaise with the Council’s Housing Benefit department on your behalf to assist with any issues that may arise with benefit claims and fast-track your query where possible;
- They will arrange for housing benefit to be paid directly to you.
Drawbacks of Direct Let scheme
There are of course a number of drawbacks to weigh up when considering letting through this method:-
- You could encounter increased local government bureaucracy or red tape when dealing with tenants’ outstanding documentation required by the Councils, Finance/Benefit departments, which can take up more of your time if you manage properties yourself. The current transition to a ‘Universal Credit’ benefits system could lead to further delays. Councils may also be slow to organise the initial letting of your property;
- The deposit guarantee offered by Let 2 Barnet is not subject to the usual tenancy deposit rules and therefore any subsequent claims will need to be agreed by both parties and evidenced via use of an independent inventory specialist. This could prove problematic where disagreements occur as Barnet Council’s decision is final & binding in all matters concerning their ‘Deposit Guarantee’ leaving landlords no recourse to a cost effective adjudication in disputed matters;
- Often ‘Data Protection’ is cited as a reason why the Council’s Finance/Benefits teams cannot communicate directly with landlords or disclose relevant information to landlords regarding their tenant’s tenancy. So you may be left in the dark if your tenant has rent arrears or their Benefit claim is suspended at any time;
- Where the Council’s Finance department deems that housing benefit/LHA payments have been ‘overpaid’ when previously paid to the landlord directly, then this overpayment will in many circumstances be claimed back directly from the landlord, leaving the landlord out of pocket and having to chase their tenant for arrears of rent;
- Alternatively, if Benefit is paid directly to the tenant and deemed to have been ‘overpaid’, then this overpayment is usually reclaimed from future benefit payments owed to the tenant, thus affecting their ability to pay their future rent;
- Should it be necessary, the process of having your property returned when evicting your tenant, can be more difficult when the local council is involved as they advise all tenants to remain in occupation until legally evicted by bailiffs;
- Typically vacant possession of a property can take 4-6 months to achieve lawfully and the financial pressure of this situation is exacerbated further for landlords if tenants also stop paying their rent in the period prior to their eviction;
- Legal & Court costs associated with eviction will usually cost landlords around £1000 + Vat.
Let 2 Barnet, Barnet Council Direct Let Scheme (DLS) is well run and works well for many landlords. It is best suited to those landlords that prefer to self-manage their properties but this type of letting is not without risks, as outlined above.
About the author
Romesh Muthiah BA (Hons) Housing & Development, MCIH, MCMI.
Romesh, as one of the two founding directors of Central Housing Group Ltd in 2000, has extensive local authority experience in temporary accommodation management. He was formerly employed (between 1993-2000) as a housing officer at the London Borough of Haringey and also as a housing officer and, subsequently, Temporary Accommodation Manager at the London Borough of Barnet, overseeing a team of 10 staff responsible for the management of over 1500 properties across north, east and west London.
Romesh has overall responsibility for all new landlord negotiation and property procurement on Central Housing Group’s popular ‘Let to Council’ & ‘Rent to Council’ ‘Guaranteed Rent’ schemes, which they have successfully operated in London for over 17 years.