Hammersmith & Fulham Council Private Letting Incentive Scheme – A ‘Direct Let’ scheme – An Overview

For landlords wanting to let their vacant properties quickly within the borough of Hammersmith & Fulham (H&F), the Hammersmith & Fulham Council Private Letting Incentive Scheme could be a sensible choice.

In a nutshell, the Hammersmith & Fulham Council Private Letting Incentive Scheme, also known as a ‘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 ‘AST Matching service’ 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 enrolment. Hammersmith & Fulham Council 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 the Council 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 Private Letting Incentive scheme

Private landlords normally request at least one 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, the Council will offer a damage bond guarantee to cover property damage 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:-

• The Council 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 bond guarantee (to cover property damage) offered by the Council offers financial peace of mind;
• The Council may offer a one-off non-refundable incentive payment as an incentive to let your property on this scheme;
• The property procurement 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;
• The council will carry out ‘Right to Rent’ checks on prospective tenants;
• A good supply of tenants for all sizes of property with ongoing support & tenancy advice.

Drawbacks of Private Letting Incentive scheme

There are of course a number of drawbacks to weigh up when considering letting through this method:-

• After the Council has nominated a tenant whom you have then signed a tenancy agreement with, the contractual relationship is directly between you and your tenant. You will be responsible for managing the tenancy on a day to day basis. The Council is not contractually obliged to do anything further and their additional or continued assistance is at their discretion / choice in relation to helping to sustain tenancies and maintain relationships between landlords and their tenants;
• 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;
• 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 £1000-1500 + Vat.

Summary

Hammersmith & Fulham Council’s Private Letting Incentive scheme 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.

If you have a property you wish to let on this scheme then please contact Hammersmith & Fulham Council’s Property Procurement Team on 020 8753 1241 or email [email protected] or go to https://www.lbhf.gov.uk/housing/private-housing/leasing-and-letting/property-and-procurement-schemes

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 20 years.

For more information please click on the website www.centralhousinggroup.com or call the office on 020 8447 1222 or email [email protected]