An anti-poverty charity today attacked the millions of pounds in sweeteners paid by cash-strapped London boroughs to private landlords to persuade them to rent to council tenants.
Despite boroughs suffering financial black holes from government cuts, it was revealed that officials had paid nearly £30 million to landlords since 2012. The “one-off financial incentives” were revealed in Freedom of Information responses from 33 London local authorities to the Zacchaeus 2000 Trust.
The charity said it showed boroughs were deploying “ever more desperate means to entice private landlords” as authorities compete with each other to secure accommodation.
Landlords want the extra money over fears that some council tenants were more likely to default on their rent. There are more than 50,000 families in temporary accommodation in London — the highest number in eight years — and a record low number of affordable homes is being built.
Between 2010 and 2014, there was a 77 per cent rise in the number of families classing themselves as homeless, reversing a decline since 2005. This has been fuelled by Government welfare cuts and not enough council housing being built.
Joanna Kennedy, chief executive of the charity, said: “London boroughs are being forced to use ever more desperate means to entice private landlords to provide temporary accommodation for homeless households. Some boroughs appear to be spending a sum equivalent to more than half the grant funding they receive for homelessness prevention on these ‘sweeteners’ to private landlords.
“The near £30 million that has gone straight in the pocket of private landlords could have been more productively spent on house building or other measures. This underlines the hidden cost of welfare reform and homelessness.”
Brent, with nearly 3,000 families in temporary accommodation, paid out the most, with nearly £2.7 million given to landlords in the past four years. A council spokeswoman said: “Whilst households may prefer that their housing need is met through the provision of social housing, investing these funds into such developments would not enable us to meet our demand.”
Lambeth gave out nearly £2.6 million, but said its £850-a-time payments “help prevent struggling families in Lambeth becoming homeless”.
Camden handed more than £2 million to private landlords, despite just 426 families being in temporary accommodation, while Barnet, with 2,904 temporarily homeless families, gave more than £2.5 million.
A Barnet council spokeswoman said the payments saved “the council £4 million per year compared with the cost of placing households in temporary accommodation”.
Richard Lambert, CEO of the National Landlords Association, said: “Unfortunately, it’s hard for councils to find landlords prepared to accommodate these tenants because they are worried that they will lose income. As a result, the boroughs have to find ways to offset the risk. One-off financial incentives can offer a solution in some cases.”
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