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Focus on the private rented sector

Landlord Accreditation WalesLandlord Accreditation Wales

Anne Rowland provides readers with an overview of the activities of Landlord Accreditation Wales.

The recent Welsh Government White Paper on Housing in Wales made a welcomed recognition of the private rented sector (PRS) as a key area of housing provision. It noted that in the last decade the number of PRS dwellings has almost doubled, now accounting for 14 per cent of the total stock in Wales (as apposed to 16 per cent rented from local authorities or housing associations.) And should current trends continue, the PRS could become the most used accommodation after home ownership in the not too distant future.

In its own words, the social housing sector has been the Welsh Government\’s prime focus in the past. However, it now firmly recognises the role that \’other organisations play in the \’whole housing system\’ approach.\’

Local authorities in Wales have traditionally had the most contact with local landlords and agents through their enforcement role regarding housing standards (currently through the application of the Housing Act 2004\’s \’Housing Health and Safety Rating System\’). This has always been a key way to tackle some of the worst housing but often prevented councils from being able to fully assist landlords who were simply unsure rather than ignorant of their legal responsibilities when renting out accommodation. Additionally many councils did not have a section where landlords (or even PRS tenants) could get any advice on the tenancy side of renting. Thus landlords were often on their own getting advice from non-reputable sources (e.g. unregulated letting agents).

In recognition of this, the Landlord Accreditation Wales (LAW) scheme was set up in 2008 as a joint venture between the 22 local authorities in Wales. It is administered by the Private Sector Housing (PSH) section of Cardiff Council on behalf of the member authorities. The scheme is predominantly funded from similar sections of the member authorities (PSH/Environmental Health).

The scheme is skills based. The concept is that by making landlords more aware of their rights and responsibilities they will be more likely to put what they know into practice and maintain well managed, high quality, sustainable accommodation.

Landlord Accreditation Wales is a significant step to make sure that local authorities and private landlords work together to make an effective contribution to meeting needs at a local level. Furthermore, it provides important recognition for landlords and peace of mind for tenants seeking accommodation.

By pulling together resources and enhancing landlord skills, it allows operational staff in authorities to spend less time \’teaching\’ landlords about their rights and responsibilities, and more time using the breadth of enforcement powers on the minority of landlords who will not improve without council intervention.

In just under 4 years the scheme has trained just over 1,700 people in Wales. The one day training is run by a procured training company, Training for Professionals. As well as delivering the accreditation training, they also provide further more in-depth Continued Professional Development (CPD) training on subjects such as Housing Benefits, Possession, etc.

The one day accreditation course covers all aspects of renting and follows the content of the ANUK and Local Government Association \’Landlord Handbook\’ (available to download from the welshlandlords website). Current PRS law is complex and not easily understood by landlords (and tenants) alike. Anyone can buy a house and rent it out, but many people don\’t realise the broad range of obligations on them. The scheme regularly has unaccredited landlords contact them from all over Wales who have simply let someone take residence in their rental property, without a written tenancy agreement or other legal requirements, but now \’want the tenant out\’. However, they find out the hard way when things go wrong how important it is to do things properly in the first place or else it can become complicated and costly.

With the rise of the \’accidental landlord\’ (people who can\’t sell their house/inherit one), they often find it hard to recognise that it is someone else\’s home once rented out and they can\’t just enter when they like or get possession at a drop of a hat. By educating such landlords and giving them the tools to rent accommodation effectively, they have an easier rental experience, as does the tenant.

There are many landlords who offer a very good service and have many happy tenants and are an asset to the PRS; this is the situation we aspire to across the whole sector. However, with the lack of rental data coupled with an unknown number of landlords operating in Wales, there could be many landlords out there struggling with their accommodation and not giving their tenants the right service.

There have been a number of really positive initiatives around the PRS in the last few years. The Housing Options websites under the umbrella www.housingwales.co.uk; the Welsh Local Government Association Private Rented Toolkit; Social Lettings Agencies; regular Local Landlord Forum Meetings and the Energy Saving\’s Trust Free Loft and Cavity Wall insulation for all rental properties to name a few. The LAW scheme regularly works with partners to make its members aware of such work and tries to increase engagement. It sends out information quarterly in a newsletter to over 2,000 people and there are also news and events pages on the website.

What\’s more, the website provides a host of functionality to ensure the longevity of the project – on-line searches for accredited landlords and agents, downloads, useful links and a landlord member area. In addition, the partner local authorities have a member section where \’closed\’ news and events can be shared, and there is a prosecution register for councils to populate (containing fraud and housing related cases), to assist with \’fit and proper\’ checks and consistency in approach.

However, there are still many landlords out there who operate under the radar, who are not aware of the initiatives and support on offer which could help them to sustain tenancies and ensure a steady income stream from their properties with good tenants.

So, could the proposals in the Welsh Government\’s paper on a \’Better Private Rented Sector\’ help with improving the reputation of this important housing sector?

In its reply to the Welsh Government consultation, the scheme and its member local authorities felt that the proposals would provide a comprehensive register of property owners (landlords) and agents in Wales, but that it is not just an administrative exercise. By requiring \’accreditation\’ training for a \’licence\’, it will improve knowledge levels and engagement with landlord and agents across Wales. And being a national scheme with clear joining criteria, it will be well advertised and become a recognised standard when renting. Additionally the proposals do not \’reinvent the wheel\’; instead building on the success of the LAW scheme.

One additional area the proposals aim to tackle is private managing agents. To use Cardiff as an example, there are about 157 agents with 2/3rds of those not being a member of any professional body and as such unregulated. This is a difficult situation, one often not realised by landlords or tenants until they have a complaint. People put a lot of faith in agents, assuming they are qualified and knowledgeable, but often this is far from the truth. Bringing all agents up to the level of reputable regulated agents already out there who are members of organisations such as the Association of Residential Letting Agents (ARLA) and the National Approved Letting Scheme (NALS) will make the letting sector more fair and valued. Currently, such membership bodies ensure the firms associated with them have agreed to meet defined standards of customer service, are part of a Client Money Protection Scheme and have a customer complaints procedure offering independent redress (usually through the Property Ombudsman).

So, although the Landlord Accreditation Wales scheme is currently voluntary, it could well be the basis of a mandatory scheme in the future. This is something which the scheme is excited about and relishes the chance to be a part of.

Anne Rowland is an Environmental Health Officer and Scheme Manager at Cardiff County Council. She can be contacted at [email protected]

The LAW website is www.welshlandlords.org.uk


Accreditation in Wales is changing: what does this mean for landlords and letting agents?

National Landlords Association provide an overview.

Accreditation is an ideal tool for landlords to demonstrate their commitment to meeting, and hopefully exceeding, agreed standards. And with accreditation soon to become compulsory for all landlords in Wales, it is hoped that standards in the Welsh private-rental sector will be exemplary.

At present, Landlord Accreditation Wales (LAW) is adopted and paid for by all 22 local authorities, with Cardiff standing as the host council. As with several other accreditation schemes including the National Landlords Association\’s (NLA\’s) Accreditation, LAW requires landlords to complete a foundation course and commit to Continued Professional Development (CPD) through further courses.

Whilst each of the accreditation providers differs slightly, it is possible to transfer landlord accreditation from one provider to another through the \’passport\’ facility. This means that a landlord can become accredited with LAW by completing another scheme such as the NLA Accreditation scheme (online or in attendance). Equally, the NLA accepts LAW accredited landlords through the passport facility.

Whichever accreditation provider a landlord opts to study with, CPD is central. LAW encourages landlords to make use of the NLA\’s Online Library to keep up-to-date with the rules and regulations governing the sector. It also encourages landlords to attend the NLA\’s regular local branch meetings as a means of learning from industry experts, networking and sharing best practice.

But accreditation in Wales is changing. As of August 2013, the LAW scheme will be replaced by Welsh Accreditation and Landlord Licensing (WALLS).

Current plans indicate that WALLS will require all landlords and letting agents to submit a list of their properties to an annual register. In addition, landlords must complete a \’fit and proper test\’. If they pass, they will be given a registration number and deadline in which to become accredited (likely to be between one and two years). Landlords who fail the \’fit and proper test\’ will need to register their property with an accredited agent or landlord working on their behalf.

Landlords and agents will also need to provide their address and date of birth so that accreditation can be monitored; landlords who do not conform and become accredited may be prosecuted.

Caroline Kenney, The UK Association of Letting Agents Executive, says:

\’We would encourage all letting agents in Wales to embrace WALLS as a positive step towards raising standards in the sector. Landlords and tenants rely on their agents to deliver informed advice and guidance, therefore letting agents should be always operate according to best industry practice.\’

Chris Norris, Head of Policy at the NLA, says:

\’Accreditation is an effective means of developing professional capabilities and offers a mark of quality which is recognised across England and Wales. In fact, many local authorities support landlords who have taken the step to becoming accredited by offering discounts on HMO licence fees and renewals.

Our recent research found that tenants are more likely to accept a rental property if they know the landlord is committed to professional development and accreditation. This affirms that, as well as being a useful marketing tool, accreditation is an effective means to help ensure landlords are aware of their obligations.\’

The NLA encourages all landlords in Wales to become accredited before it becomes compulsory in 2013 – get ahead and stay top of the class.


The Green Deal is coming, but landlords are encouraged to act now!

National Landlords Association urge prompt action.

The Welsh Government recently outlined its commitment to improve the energy efficiency of properties in Wales in the White Paper for Better Lives and Communities.

This pledge to improve carbon dioxide emissions and tackle climate change is great news for individuals living in Wales as well as the nation as a whole – more energy efficient properties mean warmer homes, potentially cheaper energy bills as well as a greener and healthier environment. But ensuring all homes in Wales are energy efficient is a big commitment and will require everyone – home owners, landlords and tenants – to get behind the schemes.

Research from the National Landlords Association (NLA) found that just over 50 per cent (51%) of landlords have made energy saving improvements to two of their rental properties and a further 12 per cent of landlords have made improvements to five or more of their properties in the last 12 months.

There are currently three funding schemes available to help improve the energy efficiency of homes in Wales. These are Nest, the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). Both CESP and CERT will close on 31 December 2012 and Green Deal funding will replace the schemes.

In light of the limited time remaining for the schemes, the NLA is urging landlords in Wales to utilise this green funding whilst it is still available.

Energy efficiency schemes still available now:

NEST: Nest is a Welsh government funded scheme run by British Gas to help reduce the number of households in fuel poverty and make Welsh homes warmer and more fuel-efficient places to live. Energy efficiency measures installed under Nest funding include central heating boilers, hot water cylinder insulation, loft, cavity wall and solid wall insulation, draught proofing and some renewable energy technologies. These measures are available to tenants and home owners in receipt of means tested benefits and living in the hardest-to-heat homes. Those wanting to find out more can call the NEST energy advice line on 0808 808 2244.

Carbon Emissions Reduction Target (CERT): Under the Carbon Emissions Reduction Target, the main energy suppliers (British Gas, E.ON, EDF Energy, RWE npower, Scottish Power and Scottish and Southern Energy) are providing free or low cost energy efficiency measures, most commonly loft and cavity wall insulation. All properties in Great Britain are potentially eligible for help under CERT, although the most vulnerable people (for example the elderly or people on low incomes) are given priority. Both homeowners and tenants can apply, although tenants must have their landlords\’ approval for work to begin.

Community Energy Saving Programme (CESP): The Community Energy Saving Programme is also run by the main energy suppliers (British Gas, E.ON, EDF Energy, RWE npower, Scottish Power and Scottish and Southern Energy) to provide free or low cost energy efficiency measures to homes in deprived areas as part of CESP. Find out if your area is eligible by visiting http://www.decc.gov.uk/en/content/cms/funding/funding_ops/cesp/cesp.aspx

The CESP and CERT energy saving schemes, which close on 31 December 2012, will be replaced with new government initiatives; the Green Deal and Energy Company Obligation.

David Salusbury, Chairman of the NLA, encourages landlords to take advantage of the current grants available:

\’With money left in the pot for the existing schemes, it\’s important that landlords and tenants alike take advantage of the funding whilst it\’s still available. It\’s free for landlords and saves tenants money on their energy bills.

If landlords don\’t act now, they may find their property cannot be legally let come 2018 under the new legislation.\’

To find out more about the energy efficiency grants available to your tenants, visit www.energysavingtrust.org.uk or call 0300 123 1234 for free energy saving advice.


New legislation a great opportunity to enhance safety in private rented sector

A view from the Electrical Safety Council.

The recently published Housing White Paper marks a significant moment in Welsh history and raises some interesting questions about the future of the private rented sector (PRS).

The White Paper explores options to improve the physical condition of all homes and the Electrical Safety Council (ESC) thinks this is a great opportunity to look more closely at bringing up safety standards for tenants.

The ESC is a UK charity dedicated to reducing the risk of electrical accidents around the home. In the last four years it has given £864,000 in grants to trading standards teams, fire services and community groups in pursuit of this cause.

UK-wide statistics show that electricity kills at least one person every week in the home and almost 1,000 are seriously injured every day – and that private tenants are disproportionately affected by electric accidents. Furthermore, they reveal that a rise in \’accidental\’ landlords has led to confusion over responsibilities between tenants and landlords.

As the number of people becoming landlords increases, with 13% of UK adults considering leasing out a property in the near future, research from the ESC has found that misunderstandings between landlords and tenants over safety are exposing millions of people to life-threatening electrical dangers. More than one fifth of all private tenants (21%) already report concerns with the electrical safety in their home and three quarters of private tenants (75%) can\’t recall discussing electrical safety with their landlord. Meanwhile 40% of landlords don\’t know they are responsible for electrical safety in the home which is the cause of much of the confusion.

The number of homes in the private rented sector in Wales has doubled in the past decade to 182,000 or one in seven residential properties, and the White Paper has highlighted extremes of good and bad practice.

Among proposals in the White Paper is one for mandatory registration of private landlords and letting agents. It is thought that introduction of such a requirement could have long term benefits for the sector\’s reputation, professionalism and general standards. When accredited, landlords and agents would be expected to adhere to a code of practice, and we believe that key conditions in the code should require landlords to:

  • get a full inspection of their electrical installation every five years
  • provide evidence of inspections for any electrical appliances provided with the property
  • ensure they have life-saving Residual Current Devices (RCDs) installed in their properties

The ESC has had positive initial discussions with Welsh Assembly Members regarding the inclusion of electrical safety measures in future housing legislation. These talks led to Communities, Equalities and Local Government Committee members Mike Hedges AM and Peter Black AM questioning Housing Minister Huw Lewis AM on the floor of the Assembly in June, expressing the ESC\’s view that RCDs should be made mandatory for the PRS.

The Minister responded by acknowledging that a number of members share the ESC\’s concerns regarding electrical safety standards in the private rented sector, but said this should be left for local authorities to deal with, rather than national legislation.

Commenting on the issue, Mike Hedges AM said: \’Research has shown us that tenants in the private rented sector are more likely to be at risk from electrical accidents due to a number of reasons, including poorly maintained electrical installations and a lack of knowledge among some landlords of their responsibility towards electrical safety.

Although landlords are legally obliged to carry out annual gas safety checks, they are not legally obliged to carry out annual electrical safety checks, which I believe needs addressing.

Wales is already leading the way when it comes to housing standards and safety measures and I believe that introducing the mandatory fitting of RCDs in all rented properties would be the next logical step to ensure the safety of people\’s homes and their families.\’

In Scotland, there have already been significant steps towards improving standards in the PRS through the Private Rented Housing (Scotland) Act 2011, and from the spring, it is expected that landlords will be required to provide tenants with a Tenant Information Pack (TIP). Information regarding the condition of electrical installations and best practice around appliance maintenance are set to be included in the pack.

If landlord licensing can now be delivered for Wales, it may put more pressure on the UK Government to fall in line by taking action to secure improved conditions in the English PRS.

ESC\’s Director General Phil Buckle said: \’We have real concerns about electrical safety standards in the private rented sector and it is an area that can cause great risks if overlooked.

Wales has made significant strides with housing safety by requiring the installation of sprinklers for all new-builds and conversions. There is now a fantastic opportunity to create a lasting legacy of safe housing throughout the region by introducing further measures which protect tenants from electrical accidents.

By setting further conditions on landlords as a licensing requirement, accident statistics could be reduced, creating a better housing stock and building a stronger bond of trust between tenant and landlord.\’

More information about the Electrical Safety Council is online at www.esc.org.uk


Their House, Your Home: The private rented sector in Wales

Their House, Your Home: The private rented sector in WalesConsumer Focus Wales recently undertook research to look at the private rented sector (PRS) in Wales. We conducted tenant focus groups and in-depth interviews with landlords and letting agents from all over Wales to explore Welsh Government\’s proposals in this area and identify wider issues that are faced when living and working in the PRS. Our report, Their House, Your Home was launched on 16 August and confirms the need for change.

Introduction

Recent figures show that the PRS in Wales has almost doubled since 1996 with the proportion of privately rented properties increasing from 7 per cent to 14 per cent of total housing stock by 31 March 2010 . Even though the PRS is on the increase as more people struggle to access and afford homes of their own, it is still perceived by some as an undesirable home choice due to expensive rents, high levels of disrepair, lack of redress and insecurity of tenure. Tenants we spoke to still aspired to be home owners. However, given the current economic situation, it is likely that the PRS will remain an important housing option for many over the coming years.

The upcoming Welsh Government Housing Bill is an opportunity to improve the PRS in Wales and our research focused on testing the proposals set out in the Housing Bill White Paper, whilst also looking at other issues that face people who live and work in the PRS.

Moving in

Our research showed that some tenants, namely students and those on low incomes, found the initial set up costs of renting a property a struggle. As well as their first month\’s rent and a deposit, tenants would commonly need to find money for additional letting agent fees. It was the consensus among tenant participants that fees were too high for the service that the letting agents provide. This cost was seen as significant to some and had wider financial implications.

We also found evidence that information on letting agent fees are not being made clear to consumers from the outset. Fees and charges are not visible on the majority of letting agent websites which makes it difficult for consumers to shop around for the best deals and understand the full cost of moving. In a competitive market like the PRS, tenants should be able to access timely information about things like the cost of letting agent\’s service in order to fully understand the costs and make an informed decision about which letting agent to use. There is a real lack of transparency in communication of fees by letting agents at present and we believe this should be addressed.

CFW Recommendations

The Welsh Government should:

  • make it a requirement for letting agents to make all fees transparent as part of their proposals to licence the sector. This should include guidance on how any fees should be displayed
  • review the legality of premium fees charged by letting agents and consider, at the very minimum, placing a cap on these

Understanding tenancy agreements

Our research found that of all groups, tenants had the least amount of confidence in their understanding of tenancy agreements. Letting agents did raise some concerns about \’accidental landlords\’ lack of understanding in this area. They suggested that these landlords had little interest in knowing about tenancy agreements and regulations relating to renting out a property and would simply pass the keys onto the letting agent. Consumer Focus Wales believe this is not acceptable. The property and all decisions relating to the property are ultimately the landlord\’s responsibility, even if it is managed by someone else.

In addition, some tenants told us they had very little opportunity to read through their tenancy agreement prior to signing it and take time to consider the clauses and what they mean. This can have serious implications on their rights within a tenancy.

As part of our research, we asked for views on the introduction of a standard tenancy agreement, one of the proposals in the Welsh Government Housing White Paper. Tenants in particular felt that this would be beneficial; they would be able to become familiar with the contract and recognise it as a government endorsed document.

CFW Recommendations

The Welsh Government should:

  • stipulate as part of the code of practice for letting agents and landlords that they must encourage tenants to read their tenancy agreements
  • continue with proposals to reform landlord and tenant law and introduce model contracts
  • commission research to look at what consumers\’ particular needs are from their tenancy agreement, conduct consumer testing during the development of the new model contract and pilot the contract before rolling out fully

Registering and Licensing Scheme

We also discussed the proposals for landlord and letting agents registration and licensing scheme with our participants. This idea was welcomed by tenants, letting agents and half of the landlords we spoke to. They felt it was a good step towards raising standards within the PRS and professionalising the industry. We feel that there is also a need to provide additional targeted support to \’accidental landlords\’ and believe that a first time landlord pack should be developed in partnership with the new licensing body.

A major concern from those who took part in our research and also from ourselves is effective enforcement of these proposals. Landlords raised concerns about how a scheme would tackle \’rogue landlords\’ and whether it would just be an additional burden on those landlords who are already provide a quality service. For this reason, it will be important for local authorities to have the right powers and tools to undertake enforcement action when landlords (and letting agents) are not meeting the required standards.

CFW Recommendations

The Welsh Government should:

  • review local authorities capacity to undertake enforcement action against landlords currently, identifying issues of concern and appropriately address these to ensure that local authorities have the tolls and resources to effectively enforce a new regime
  • develop an information pack for \’first time landlords\’ to receive upon registration. Advice should include managing a tenancy and tenant rights and what information they should provide to tenants

Tenants: knowing and understanding their rights and where to go when things go wrong

We found that tenants did not really know what to do or who to speak to during times when they were faced with a difficult landlord or letting agent. Few tenants had sought advice if they had problems with their landlord and often tenants did not know where to go. Some tenant participants we spoke to said they feared complaining about the landlord or kicking up a fuss and feared eviction. We believe that tenants should not fear retaliation evictions and should be able to ask their landlord for repairs and maintenance without being concerned about the consequences.

Our research shows a general lack of knowledge and awareness among tenants on issues relating to the PRS and a lack of understanding about where to go when they do experience problems. Letting agents also told us that they felt tenants needed more education about their rights and responsibilities.

However, some of the letting agents we spoke to mentioned that tenants were starting to ask more questions before picking a property and a few landlords said that tenants were becoming more demanding. This shows there is a willingness to know more among tenants.

Moving into a property can be daunting, especially if you are a first time renter, a view strongly expressed by the student group we spoke to. We proposed to tenant participants the idea of a tenant information pack as a way of gaining a better understanding of their rights and responsibilities and what to expect during their tenancy. This was met with overwhelming support and we believe a tenant information pack should be introduced in Wales.

CFW Recommendation

The Welsh Government should:

  • develop a tenant information pack to include information on the rights and responsibilities of tenants and sources of advice and information

Conclusions

Our research shows the challenges faced by people living and working in the PRS as a consequence of lack of regulation and guidance within the industry. There is evidence of positive landlord/tenant relationships and good practice in property management. However, a high number of problems are regularly faced by tenants, including harassment, illegal evictions and poor quality standards within their properties.

There is a real need for change, which has been identified by the Welsh Government through their commitment to improve the PRS in Wales. Our research provides evidence to inform exactly what tenants, landlords and letting agents really need and what these proposals need to take into account moving forward.

For more detail on our findings and further recommendations on how to improve the PRS based on our research please go to: www.consumerfocus.org.uk to read the report in full.

For more detail please contact: Rhian Evans, Policy Manager, 029 2078 7100, [email protected]


Tackling Homelessness through Financial Inclusion

Tackling homelessness through financial inclusion

Welfare benefit reform need not lead to a rise in homelessness, if innovative steps are taken now, writes Adam Chown.

When local housing allowance (LHA) was introduced in April 2008, it reformed the way housing benefit was calculated and paid to claimants in the private rented sector. One of the key principles it introduced was payment of benefit directly to the claimant in the majority of cases, rather than to the landlord. The intention of this principle, as is repeated in the Universal Credit white paper, is simply: \’to encourage people to manage their own budget in the same way as other households\’.

However, as simple as this theory is, it does presume a level of financial education and access to financial services that not everyone shares. In practice, since LHA has been paid directly to them, a number of private tenants have found it hard to budget and prioritise their rent. This has lead to arrears and, in some cases, eviction and homelessness. With the advent of Universal Credit, where a number of benefits will be combined in a single monthly payment, this problem will be exacerbated and will extend from the private rented sector into social housing. Local Authorities can currently apply a \’safeguard\’ process whereby the LHA is paid directly to the landlord in some instances (usually where there are 8 weeks of arrears). Whilst this does remove from the tenant the responsibility for rent, it does help to maintain tenancies. Under Universal Credit proposals, there will be far fewer exemptions, or payments made under safeguard, they will be temporary and the responsibility for deciding whether an exemption is applicable will no longer lie with the Local Authority; instead it will be managed centrally by Department of Work and Pensions.

Understandably, this has led to fears that, where claimants are paid directly, and paid larger sums through the combination of a number of benefits, rents many simply not be a priority for some. Landlords, be they private, Local Authority or Housing Association, face the risk of a large number of tenants in rent arrears. Combine this with the Council Tax proposals and it is clear why a number of Local Authorities and Housing Associations have established Welfare Benefit Reform Boards to attempt to assess the financial impact of reform.

There is support available. The Tackling Homelessness through Financial Inclusion (THFI) project is being delivered by Wales Co-operative Centre and aims to mitigate against the threat of homelessness through the promotion of financial inclusion. Central to the project is the development of best practice in the current delivery of LHA through credit union rent accounts across Wales. There are some variations on the model, but the basic premise is simple; a tenant joins the credit union and opens a rent account into which the authority pays the LHA. This money is then ring-fenced and forwarded to the landlord, who pays a small account fee for the service.

There are several benefits to this approach. Firstly, the tenant remains in control of their benefit; it is their benefit going into their account. They become more financially included and are introduced to the range of products and services a credit union can provide, such as savings accounts and affordable loans. Some credit unions can also provide current accounts and pre-payment cards, further supporting tenants into financial inclusion. For landlords, the employment of a credit union rent account model gives assurance that LHA payments will support the rent. In addition, all benefit payments are paid directly to a tenant\’s personal account and transferred out to the landlord, so any overpayments will be recoverable from the tenant in all circumstances. Even with the prospect of an account fee, landlords should appreciate that this model will help to maintain tenancies, both under current LHA arrangements and future welfare benefit reform.

The real opportunity for Local Authorities, and to social landlords, in the adoption of this approach is in working with credit unions to develop their product to accommodate Universal Credit and the needs of their service users and tenants. Whilst the THFI project currently looks at housing benefit and rent accounts, credit unions are already developing budgeting, or \’jam jar\’, accounts that can help support a Universal Credit claimant prioritise other payments. This is achieved by ring-fencing, by agreement, certain amounts for rent, utilities, council tax etc. and loading the remainder onto a pre-paid card for the tenant to use as they wish. The amounts of \’disposable\’ income can also be staggered into four weekly payments within the Universal Credit cycle to further aid budgeting.

Therefore, whilst there are still several unknowns about the future of welfare benefit under the Universal Credit proposals, credit unions may offer local solutions to a national challenge. By supporting citizens into financial inclusion now, promoting the credit union model, authorities can mitigate the impact of the Welfare Benefit reform moving forward.

The THFI project has been running across Wales since October 2011, and is funded by the Oak Foundation and Welsh Government. The aim is to develop a credit union rent account model where none exists within an authority, and, where models and relationships exist already, to promote the scheme to private landlords and tenants to maximise take up.

Guiding the THFI project team is a project advisory group consisting of representatives from several key stakeholder groups, including Welsh Government, Welsh Local Government Association, National Landlords Association, Shelter, Chartered Institute of Housing Cymru and Cymorth Cymru. One of the key outputs of this group has been the THFI Project Toolkit – an online resource for local authorities, private landlords, credit unions and tenants which provides information and resources on establishing and promoting Credit Union Rent Accounts, as well as Latest News on the THFI. One of the key tools on the Toolkit for Local Authorities is a template safeguard policy that incorporates the Credit Union into the decision process – making the Credit Union an interim measure before the direct payment to landlords. Other tools include a calculator for landlords to assess their exposure to the Welfare Benefit changes and latest information on Universal Credit.

To access the online THFI Toolkit, please visit www.walescooperative.org/THFIToolkit.

If you feel you can help support the Tackling Homelessness through Financial Inclusion project or for more information on the project, please contact Project Manager, Adam Chown at [email protected]

Case Study – Neath Port Talbot Credit Union

Working with Neath Port Talbot CBC, Neath Port Talbot Credit Union (NPTCU) have been offering a Rent Account product for several years, and there are currently 30 landlords with 201 tenants using their scheme.

Under the NPTCU model, housing benefit is paid into the credit union, ringfenced, and forwarded by agreement to the landlord. An administration charge of 5% of the rent is levied on the landlord, who agrees that 2.5% is charged as an administration fee and 2.5% is returned into a savings account for the member. Unique to the NPTCU Rent Account model, this \’Christmas Savings\’ account is accessible by the member in December, when the Credit Union phone the members in the scheme and allow them to access this fund.

NPTCU have identified several benefits to landlords and the Local Authority based on their own research during the delivery of their scheme. The key benefits to landlords include; not having to worry about collection of rents, a cost saving in rent collection/arrears services, an assured cash flow, and, most importantly for those using the scheme, rent collection rates have increased from between 74-79% to 95%, supporting property maintenance programmes which improve the property and therefore the living standards of the individual tenants.

Steve Mallinson, General Manager at NPTCU, also claims the scheme has been sited as a contribution to the prevention of homelessness in the Neath Port Talbot Borough with considerable cost savings to the Local Authority.

Arguably it is the tenants who benefit most from this scheme. Not only do they benefit with the budgeting support and advice they can receive from the Credit Union, they can also access low cost loans that credit unions can provide. NPTCU claim that over 76% of tenants on their scheme now have loans with NPTCU, where otherwise they may approached a high interest loan provider.

Another example is North Wales Credit Union\\\’s Rent Direct service through which housing benefit ispaid directly into the tenant\\\’s credit union account. Regular rent payments are then made via the credit union to the landlord using a system that rent-fences the sum of money required for rent payments the moment it reaches the account, ensuring that it cannot be spent on other things.


Another successful year for CanDo Lettings

CanDo Lettings is celebrating another successful year as Wales\’ leading social lettings agency. Over the past year CanDo Lettings has doubled in size and following the massive success achieved in Cardiff, the social lettings agency was commissioned by the local authority to set up in the Vale of Glamorgan a year ago.

CanDo Lettings was established in 2005 by Cadwyn Housing Association to help meet the increasing demand for housing in Cardiff. With Government-funding decreasing and the availability of land becoming more scarce, Cadwyn was aware that it would become increasingly challenging to provide affordable homes for people in need.

CanDo Lettings helps to meet the increasing demand for housing by managing homes on behalf of private landlords and providing them to those in need. This provides a win-win solution for all parties: tenants benefit from an affordable home; landlords\’ benefit from CanDo\’s full property management solution, with most properties being let within days and local authorities benefit from reduced housing waiting lists and a reduction in homelessness and cost savings.

Over the past 7 years CanDo has grown from strength to strength, effectively competing with larger commercial lettings agencies. CanDo combines a commercial and business-like approach with a strong focus on tenants, ensuring they are always put first. CanDo now manages over 350 properties throughout Cardiff and the Vale of Glamorgan and is continuing to grow rapidly.

The private rented sector is becoming increasingly important in meeting demand for housing, as highlighted in the Welsh Government\’s Housing White Paper and the Montague Review, which looked at investment into the private rented sector. CanDo Lettings has demonstrated that working in partnership with the private rented sector can achieve exceptional results and can provide a new start for tenants who have experienced difficulties in finding adequate housing.

One tenant who has had his life turned around by CanDo Lettings is Trevor Jenkins. Trevor is deaf so he faced a lot of barriers when trying to find private rented accommodation due to communication issues and discrimination.

Trevor grew up in Cardiff but left to live in Kent with his wife. Their relationship broke down and he was experiencing harassment in his property in Kent so he decided to move back to Cardiff to start over again.

His sister Jacqueline acts as his support worker and helps him a great deal – she is a tenant of Taff Housing Association and had heard very good things about CanDo Lettings. She went to the Housing Advice Unit to refer Trevor to the social lettings agency.

CanDo were able to help Trevor find an excellent one-bedroom ground floor flat in Rumney, which is close to where he grew up and suited his needs. Trevor loves his new flat and is thrilled that CanDo were able to help him. He and his sister came to Cadwyn\’s Open Day to let the CanDo team know how pleased they were and how much of a difference the new home has made to Trevor.

This is just one example of the difference that CanDo Lettings has made to tenants\’ lives by working in partnership with the private rented sector. Landlords have also spoken very highly about CanDo Lettings\’ service. Carol Williams, who owns two properties which are managed by CanDo, said: \’CanDo Lettings were very helpful and dealt with all the legalities. I own another property which is also let by CanDo Lettings and I was keen to work with them again as they take all the hassle away and deal with all the arrangements. I\’m really pleased with the service they have provided and would recommend them to any landlord.\’

So what does the future look like for Wales\’ leading social lettings agency? Having achieved exceptional results in Cardiff and the Vale of Glamorgan, CanDo are now looking to continue growing in these areas while also looking to expand into other local authority areas.

CanDo Lettings\’ Director Helen Armstrong commented: \’As Wales\’ leading social lettings agency we are ideally placed to meet the increasing demand for housing in Cardiff. The success of CanDo Lettings is underpinned by the dedication of the team and the strong social values of the organisation. The future looks bright for us as we look to establish the CanDo Lettings service in other local authorities and we are confident that the success we have achieved in Cardiff and the Vale of Glamorgan will follow us as we enter other regions.\’

CanDo looks set to continue its success in providing affordable homes and making a difference to the lives of people in need.

More information is available online at www.candolettings.co.uk


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