Landlords losing out due to sky high deposits

Landlords and letting agents could be losing out on £61m of rent every month by pricing potential renters out of their properties – while the government spends £1bn keeping them in temporary accommodation.

Related topics:  Landlords
Warren Lewis
12th June 2018
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Official figures show the number of families living in temporary accommodation has risen by 500% since 2009, with 78,930 families – and 120,510 children – currently living in emergency housing.

£845m of public money has been spend on temporary accommodation for homeless families since 2010 – with nightly emergency housing currently costing the government £160m every year. If these families were living in permanent private rented sector homes with the UK average rent, landlords and letting agents would be collecting and extra £60,933,960 of rent a month – or £731m a year.

Ajay Jagota responded to the figures: “It’s heart-breaking that so many people have no permanent roof over their heads, children in particular. What is frankly scandalous is that it doesn’t have to be this way.

This appalling situation is inevitable but in many cases entirely avoidable given landlords and letting agents perverse insistence on only renting properties to people who can hand over an average of more than £1000 in deposits to move in. As I constantly keep saying, this doesn’t just costs them tenants, as these figures make clear, it could be costing them £731m of extra rent a year.

No-one is saying that deposit costs are the only cause of homelessness but if you’re a landlord or letting agent and you can’t rent out a property, ask yourself why that is case when there are enough people to fill a town the size of South Shields, Burnley or Carlisle who are literally desperate to rent a permanent home.

At a time when the government’s own impact assessment is predicting the ban on Letting Agents Fees will cost the industry hundreds of millions of pounds and even force letting agencies out of business, the industry has to ask itself whether or not it can afford to write off that sort of income, especially when deposit replacement insurance offers far superior protection against unpaid rent, property damage and legal fees.

And at a time of tightening public finances, the government needs to be asking if this is the wisest way to spend £1bn”.

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