This scheme is part of the government’s initiative to reduce incidences of homelessness, and will be aided by a new £20 million fund set up to help councils financially support residents; either by paying for tenancy deposits or helping with rental costs. Southwark Council are the first to trial the deposit free renting scheme in the UK, and if successful, a nationwide rollout will commence.
Following a product development process, jointly funded by Southwark Council, Waltham Forest Council, and London Ventures, Southwark Council has agreed to collaborate with rental app Canopy in a pilot to tackle one of the biggest causes of homelessness in the borough – the cash security deposit.
According to the London-based research, 39% households stated loss of a shorthold tenancy as the primary reason they have approached the Council for help. However, a striking 89% of Local Authorities reported difficulties in securing occupancy in the private rental sector.
Canopy will launch a pilot project with Southwark Council to secure private rental accommodation for the borough’s most vulnerable renters. Southwark Council receives twice as many homelessness applications as the average for other inner-London councils, and coupled with the rising costs of living in the borough, this has lead the private rental sector to become unaffordable for the council to use to prevent homelessness.
Southwark Council’s partnership with Canopy will see the cost of private sector renting to the council drastically reduce, as the traditional upfront cash deposit will be replaced by Canopy’s one-off, DepositFree insurance policy at a fraction of the cost. This will free up a significant proportion of usable council funds currently locked away in private security deposits, enabling these funds to be funnelled back into community and prevention programmes.
Canopy will also be providing their RentPassport solution to at risk renters, with the aim to help tenants build a verifiable record of their rental history. Using Canopy, rent will be paid directly via the Canopy app, which will help renters improve their credit scores over time. Tenants will be able to build financial resilience through access to more affordable financial products, as well as gaining access to properties in the private rental sector. This also removes the risk of rental arrears for landlords.
By helping tenants build a renter profile that reflects their history as a renter, Canopy’s platform is responding to Local Authorities’ move towards alternatives that improve the transition of individuals and families into the private rental sector. The scheme will help local authorities to prevent gaps in housing, whilst also reducing occurrences of homelessness.
Ahead of the pilot launch, private landlords and agents who are willing to help economically challenged renters find homes in the private rental sector are welcome to register their interest with Canopy. Following the pilot run of the programme with Southwark Council, preparations will be made for a nationwide rollout.
Councillor Stephanie Cryan, cabinet member for housing and modernisation at Southwark Council, said: “One of the biggest private sector housing barriers for our key workers and homeless customers is often the requirement to put down a deposit. We have been looking for a solution that not only reduces costs in securing tenancies for individuals, but also upholds our community goals. Canopy, having been through a rigorous selection process, proved to be the kind of service we needed to address this issue and uphold our commitment for all of our residents to have a place to call home.”
Tahir Farooqui, CEO of Canopy, commented, “It’s an exciting prospect to be working with Southwark Council on one of the biggest issues facing Londoners. We are on a mission to build a Rental Marketplace that connects with a renter as soon as they rent their first home, and stays with them throughout the duration of their tenancy and journey to homeownership. Canopy exists to transform the way people rent and live, and we are committed to building financial resilience through actionable insights such as our RentPassport (akin to LinkedIn for renters), that nudges people to make responsible forward-looking decisions. We’re proud to be making a marked difference on a community level, and hope to see other councils following our initial pilot.”
