A landlord association has called for councils and charities that refer homeless or vulnerable tenants to take out mandatory rent guarantee insurance.

Portsmouth & District Private Landlords Association (PDPLA) believes these bodies should think and act like a letting agency when introducing tenants - or put landlords at risk of shouldering unmanageable rent arrears and possible financial ruin.

It is regularly approached by local authorities, charities, parole groups and others seeking to house applicants who are homeless or at risk of homelessness but says research shows such tenants are 30 times more likely to default.

Vice chairman Alwin Oliver (main image, inset) cites the example of one portfolio landlord who has housed 54 people referred by housing options - mostly former homeless people - since the pandemic. Of these tenancies, about 50% have now failed, ending in eviction, imprisonment, or abandonment.

“It is not enough to introduce a tenant and hope for the best, abandoning a landlord to their fate,” says Oliver. “In fact, at worst it can be negligent to the point of recklessness. We have seen landlords who appear to us to suffer something like post traumatic distress…owing to the arrears and costs of dealing with a bad tenant.”

Rent collection

Seeking Alternative Payment Arrangements takes on average 8.5 weeks to arrange and, in many cases, rent collection can take up three hours per tenant per month, he adds.

PDPLA believes agents should be regulated to reduce risk and, by extension, charities and housing options making referrals to private landlords should also be qualified, licensed and regulated by law.

The association would like all landlords and agents to use referencing and where necessary to seek a guarantor, with an undertaking by bodies to provide the initial policy and ensure it renews annually.

“Landlords should not exist in a silo; integration should be genuine, meaningful and enable two-way communication across support teams (such as addiction services), particularly in regard to supporting a tenancy that is breaking down by reason of both arrears and other challenges to the tenancy,” adds Oliver.