Council ready to buy homes where PRS tenants face eviction

Scheme sees council setting criteria for the acquisition of homes on the open market.

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A council coping with nearly 800 families and rising in temporary accommodation is ready to buy homes on the open market.

Milton Keynes council moved closer to making buys this week, with a new type of tenancy given the go-ahead.

Approval has been given at committee level for the council to buy the homes of tenants at risk of being made homeless – many of them through Section 21 evictions.

Under the flexible two-year tenancy scheme, tenants get time to look for new rental accommodation or apply to become a council tenant.

Cllr Nigel Long, cabinet member for Housing and Regeneration, said the council would “take up a clear position” of buying homes which had been put on to the market with tenants who were in “danger of becoming homeless” through no fault of their own.

Milton Keynes council plans to build more houses, but the process is acknowledged as proving so “grindingly slow” that to get more homes into its stock it buys homes on the property market.

So far, the council is on track to buy 50 properties by the end of July at a total cost of £8m, with another £350,000 spent to bring them up to standard.

Over the summer months and into early autumn last year, the number of households in temporary accommodation across the council area began to rise sharply and has continued to rise ever since.

In the six months from October to March, the number of households in temporary accommodation rose from 539 to 723.

At the time of this week’s decision there were 786, with the number of applications to be considered homeless up by 140% to 3,436 over the last year.

This time period ties in with the introduction of the Duty to Refer, which was placed on public sector organisations from October 2018.

The single biggest reason given by households for them becoming homeless is that their landlord has served them with a Section 21 Notice.

At this week’s meeting of the Delegated Decision Committee, Cllr John Bint, himself a landlord, queried whether the council would be accepting tenants who were in rent arrears.

“Most people being evicted under section 21 would be in arrears – they may be so deep in arrears that the landlord has to sell the property,” he said.

But Ellie Nickless, the council’s head of homelessness prevention and housing access, said the main reason for section 21 evictions was landlords wanting to sell, rather than tenants being in arrears.

Cllr Allan Rankine questioned whether spending an average of £167,000 per house was “using a hammer to crack an egg” when the government has said it intends to ban section 21 evictions.

But Michael Kelleher, the council’s housing and regeneration director, said it was just one of the options the council could use to tackle homelessness.

“In some parts of the borough, it is cheaper to buy than to build,” said Kelleher.

BACKGROUND: Milton Keynes flexible tenancy scheme

Milton Keynes council is developing its own pipeline of affordable housing and is planning to bring forward more than 500 new homes by 2022 – with scope for growth beyond.

However, due to relatively long lead-in times, the number of new homes that the council can build over the next 18-24 months is modest.

Consequently, the council is supplementing the provision of new truly affordable homes by acquiring existing homes on the open market.

The council has set criteria for the acquisition of homes on the open market to ensure the acquisition represents value for money and is both affordable and viable.

Current criteria include the need for the property to be provided with vacant possession.

This is to avoid creating a secure tenancy with a hitherto private tenant outside of the normal allocations policy.

Following this approach can result in the council buying a property from a landlord and placing the sitting tenant in temporary accommodation.

The proposal seeks to allow the council to buy a property with a sitting tenant by enabling it to offer a two-year flexible tenancy.

During the two-year fixed term the tenant will be expected to:

  • Continue to look for alternative accommodation in the private sector (the household will have a named officer to support this)
  • Register for housing on the council’s housing register
  • Bid for alternative council accommodation in line with the reasonable preference band awarded
  • Maintain a clear rent account throughout
  • Comply with all other tenancy conditions

If, at the end of the two-year fixed term, the tenant has complied with all conditions, including evidencing attempts to secure alternative accommodation in the private sector but which ultimately failed, their tenancy will be automatically converted to an Introductory Tenancy, and they will either:

  • Be allowed to remain in the property subject to their reasonable preference and priority being sufficient to warrant an allocation of that property under the allocation policy; or
  • Be made a direct offer of an alternative property for which they have reasonable preference and priority

The criteria for buying a property and offering a sitting tenant a flexible tenancy will be:

  • Only considered where it is clear the landlord is intent on selling the property, and a failure to buy it would render the household homeless with a statutory right to access temporary accommodation
  • Considered within the same spending caps currently used where an acquisition with vacant possession takes place
  • Dependant on the condition of the property – any remedial works needed to bring the property up to an acceptable condition will need to be at a level where any work can be undertaken with the tenant in situ
  • Dependent on the property being suitable for the household – i.e. where there is no significant under-occupation or overcrowding
  • Dependent on the not having tenant committed any serious breaches of tenancy, such as considerable arrears of rent, significant anti-social behaviour or where there have been unauthorised structural alterations made to the property

Among other options considered were:

  • Buying the properties on the open market but with vacant possession
  • Buying the properties and awarding the sitting tenant an Assured Shorthold Tenancy (AST)

As a local authority, the council is not permitted to offer ASTs, but could establish a wholly owned housing company, which could then offer ASTs and develop its own policy on lettings outside of the council’s existing policies.

While this was outlined as an option for the longer term, it was not felt to address the current issues given the need to address the increased use of temporary accommodation quickly.

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