Placing homeless households in the private sector: Housing Rights’ position

In the recently launched consultation on social housing allocations, the Department for Communities made 20 proposals. We consider one of the biggest of these: allowing the Housing Executive to discharge “Full Duty Applicant” (FDA) homeless households into the private rented sector.

Below we have summarised Housing Rights position on this proposal. However, you can read a more detailed analysis.

The Department’s proposal

The Department for Communities

 "...propose that the NIHE could, where appropriate, meet its homelessness duty by securing suitable accommodation in the private rented sector, subject to certain safeguards. This means, in line with practice in other areas of the United Kingdom, that reasonable accommodation could include private rented sector accommodation.

This would enable the NIHE to meet its homelessness duty on a tenure-neutral basis, provided the accommodation that it offers

• is reasonable for the household to occupy;
• is of the appropriate standard; and
• is available for a reasonable period of time, e.g. a 12-month tenancy.”

In the consultation paper, the Department state that current supply of social housing may be insufficient to permit the discharge of all FDA clients, and consider that in recent years, new regulation has improved both tenancy management and security of tenure. This regulation is specifically named as:

• Landlord Registration
• Tenancy Deposit protection schemes

Housing Rights’ position

We recognise the need, given the shortage of social housing, to make effective use of the private rented sector (PRS). However, we believe it is premature to permit the Housing Executive to discharge homeless people into the private sector. Recent developments in the regulation of the private sector have not made sufficient improvements in standards, security of tenure or tenancy management to make the private sector appropriate for homeless households.

Standards

The Department state the Housing Executive will only place homeless households in the private sector if “the accommodation is of the appropriate standard.” Housing Rights would welcome clarity on how “appropriate standard” will be defined. Between June 2015 and June 2016, we dealt with over 3000 issues relating to housing conditions, with 71% of these cases involving privately rented properties. In our experience, the current Fitness Standard (which is under review) is insufficient, and it is likely that poor-standard houses in the private sector will be concentrated in the cheaper properties on the market – and given that Housing Benefit will only pay for the cheapest 30% of the local private sector, this is likely to be where homeless households would end up.

Tenancy duration

The Department further state that the Housing Executive should only discharge into the private sector where the tenancy is available for a “reasonable period of time, e.g. a 12-month tenancy.” It is Housing Rights’ strong view that 12 months is not nearly long enough to provide enough stability and security to allow discharge of homeless households into the private sector. Housing Rights would encourage the Department to consider recent developments in Scotland, where private tenancies from 1st December 2017 are indefinite, and can only be ended by the landlord on prescribed grounds; and the Republic of Ireland, where private tenancies last 4 years by default.

Regulation

The Department state that recent regulation – specifically Landlord Registration and Tenancy Deposit protection – has “helped to improve tenancy management and provided greater security of tenure”. Housing Rights does not feel, however, that regulation and standards within the private sector have improved sufficiently. The Tenancy Deposit Scheme can only claim to have “improved tenancy management” in the specific context of deposits; meanwhile, Landlord Registration cannot be considered to have improved security of tenure, as in its current form, Landlord Registration is simply a database. Housing Rights would encourage the Department to consider Landlord Registration as a basis for landlord licensing, which could provide an effective and valuable framework to ensure the quality of accommodation for homeless households.

Housing Rights’ recommendations

The private rented sector has considerable potential to become a “sector of choice”, which could provide decent homes for homeless people. However, the private rented sector in Northern Ireland does not, in Housing Rights’ view, currently meet the necessary standards for this to happen.

We recommend the Department give consideration to the below, before the Housing Executive are permitted to discharge homeless households into the private rented sector:

Execution of the “Proposals for Change” to the PRS.

The Department’s proposals for change to the private rented sector were published and consulted on in early 2017. Proposals covering tenancy management, security of tenure, supply, affordability, property standards and dispute resolution have been advanced. These proposals should be reviewed in light of responses to this consultation, and consequently brought into law.

Execution of the Review of the Housing Fitness Standard.

The Department’s review of the fitness standard was consulted upon in 2016. Given both the general concerns with the current statutory Standard, and the fact that the PRS is home to a disproportionate share of sub-standard housing (both outlined above), we would encourage the Department to bring forward proposals for change to this Standard for consultation, and execute any improvements to this Standard.

Longer tenancy terms for FDA-discharge tenants.

If FDA households are to be discharged into the PRS, we recommend that the Department increase the minimum tenancy term beyond the proposed 12 months, and consider recent developments in private tenancies in Scotland and the Republic of Ireland.

If you or your organisation are considering responding to the consultation on social housing allocations, we would encourage you to read our full position paper on discharging homeless households into the private rented sector.