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Capital Letters - can landlords and councils really work together?

The relationship between the overwhelming number of good landlords and local authorities tends to be limited or possibly non-existent.

With the far smaller number of not-so-good landlords the relationship is much more frequent - you only have to read Landlord Today’s reports of rogue landlords in court to see how and why.

But local authorities in a scheme called Capital Letters believe there is a way that they and landlords can work together to the benefit of all concerned - and especially the tenants.

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Capital Letters was set up in 2019 by a group of London councils to enable more families to access affordable homes in the private rented sector; two third of the capital’s councils now backs this scheme.

Capital Letters works with private landlords to find properties at local housing allowance rates so families can move out of temporary accommodation or avoid homelessness. It also provides a tenancy sustainment service once the property is let to support both tenants and landlords to ensure the tenancy is successful. 

As a non-profit company, Capital Letters was set up to disrupt the private rental market and increase access to good quality PRS homes for families on benefits. By August 2021, Capital Letters had offered over 7,500 properties to London councils; two-thirds of families renting through Capital Letters were housed in-borough.

A housing economics expert at the London School of Economics, Christine Whitehead, had conducted an independent review and has written:  “The potential for increasing the proportion of households who can be offered an assured shorthold tenancy in this way is clearly a major reason for Capital Letters’ existence. Its progress especially over the last six months suggests that the potential benefits are increasingly being realised. 

“There is evidence of increasing success and its capacity to disrupt will grow as activity rises – and as Capital Letters becomes more important for landlords - but it will take time.”

The LSE report highlights a potential saving for councils of £4,000 per property over two years compared to the costs of housing a family in temporary accommodation. 

“The more boroughs that become active members, the more value comes from the pan-London agreements on standardised incentive payments to landlords and on quality standards. In addition, a reduction in inter-borough competition strengthens Capital Letters’ capacity to negotiate, reduces costs and increases supply.”

As well as finding properties for boroughs, Capital Letters also offers a tenancy sustainment service to both families and landlords, including help with benefit claims and maximising household income to improve affordability. By the end of August, the company had secured over £650,000 in benefits and grants for families since the start of 2021 alone.

Capital Letters evaluates the success of the tenancy sustainment service through two key measures: the income accessed on behalf of families, and the number of tenancies maintained. 

Of the 400 tenants housed through Capital Letters who are nearing the end of their two-year AST, so far only six were identified as at risk of eviction in the LSE report.

Jackie Odunoye, chair of the Capital Letters board, says: “Despite the impact of Covid on the private rented market in London, this review shows that Capital Letters is making a real positive difference to families at risk of homelessness with more able to find secure and settled homes. 

“We are determined to increase significantly the number of properties we offer our member councils and provide support to families and landlords to ensure the tenancy is a success.”

And Jeff Crudgington of Cot Estates, which has let over 60 properties through Capital Letters, adds:  “We work with Capital Letters whenever we can because it’s easier and we have access to tenants across London. We have developed our LHA-rate letting service because Capital Letters has made it possible and they are having a real impact on this part of the market.”

Is this something that could work not only in London but across other major cities? Could this unite landlords and councils in common cause? Or is it a pipe dream?

*The Capital Letters website can be found here

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