A Communities and Local Government select committee report out today on the private rented sector said moving people out of London was the only way councils could mitigate the impact of benefit caps.
Cuts to benefits had left local authorities with too few properties in their boroughs where they could afford to house claimants, the MPs found.
Westminster Council had placed tenants in Bognor Regis and Kent, while Newham Council said any government restriction on where local authorities could place homeless people would be ‘hugely unhelpful’, the report stated.
The MPs called for homeless housholds to be offered a new property in their local area ‘where possible’ but where tenants had to be moved out, information sharing between the two authorities involved and a full discussion with the prospective tenant should be a statutory duty.
‘It nevertheless appears inevitable that councils in areas with high rents, London in particular, will place homeless households outside the area, including in coastal towns,’ the report says.
‘Before any placement, there should be a full discussion with the receiving authority and the prospective tenant and information about the household and its ongoing needs should be shared. The government should consider making this a statutory duty.’
Although, the select committee decided rent controls were not the answer to the ‘acutely high’ rents in London and the south east, and steps should be taken to increase supply.
‘We agree that the most effective way to make rents more affordable would be to increase supply, particularly in those areas where demand is highest,’ the report states.
Build to rent funds could assist in delivering this, the committee said, but the government must ensure it led to more houses being built rather than just speeding up the delivery of homes already in the pipeline.
The build to rent fund was a pot set up by the government following the Montague report, published in August last year, which recommended boosting the supply of private rented sector accommodation. The government initially set out £200 million to stimulate new private rented sector homes and increased this to £1 billion in the Budget earlier this year.
Longer tenancies were also said to be necessary, with an increasing number of families moving into the private rented sector.
The committee said these could be provided within the existing legal structure but recommended stronger powers to evict tenants who fall behind on rent.
‘We need to change the culture, and to find ways to overcome the barriers to longer tenancies being offered,’ the report says. ‘The ability to secure eviction more quickly for non payment of rent will encourage landlords to make properties available on longer tenancies. The government should also set out a quicker means for landlords to gain possession if they can provide proof that they intend to sell the property.’
The committee called on the government to revisit its previous recommendations issued in a report in May last year to address the ‘urgent need to boost supply across all tenures of housing’. These recommendations, in the report Financing of new housing supply were: Large-scale investment from institutions and pension funds; changes to the financing of housing associations, including a new role for the historic grant on their balance sheets; greater financial freedoms for local authorities; and new and innovative models, including a massive expansion of self-build housing.