Rent Deposit and Rent Guarantee Schemes

Rent deposit or guarantee schemes can remove financial obstacles to private renting, provide advice and support, and liaise with landlords. This section aims to give an overview of the variety of ways that these schemes can work, with some examples of good practice.

What kind of schemes are available?

Rent deposit schemes provide the cash deposit required by many landlords, on the tenant’s behalf. Tenants are usually expected to gradually save and repay this sum over the course of the tenancy, and the tenant is then able to carry forward the deposited money for future lettings. Alternatively, rent guarantee schemes offer landlords a guarantee that damage or arrears will be paid for, rather than paying a deposit in advance. Rent deposit or guarantee schemes are often ring-fenced for a particular group such as people with low needs, or statutory homeless people in temporary accommodation. They are often means-tested and many schemes will only work with people receiving benefits. This can be an obstacle to people who are working, including people from Central and Eastern European countries and others without recourse to public funds. Often the key distinction between schemes is the level of intervention offered.

Your local authority housing department should be able to advise whether there are any suitable schemes locally. Crisis also operates a national network of rent deposit schemes for non-statutory homeless people. Check the map to see whether there is a scheme in your area. In London, Broadway's Real Lettings and OSW's Transitional Spaces Project will all work with pan-London referrals.

Good practice examples

These examples demonstrate the range of models which have been used and may be useful in designing new schemes. Some of the learning from each scheme may also be transferable to non-specialist contexts such as how hostel staff work with people looking to access private accommodation.

Working with a high need client group: Equinox rent guarantee scheme in Wandsworth

Equinox provide a rent deposit guarantee scheme, funded by the Drug Interventions Programme, as part of their floating support service for ex-offenders with substance misuse issues. This is a good example of a project working with a group that has traditionally been considered high risk for the private rented sector.

Service users must be abstinent or be managing their substance misuse very well before accessing the scheme. They must also be willing to access floating support and staff have found it vital to start providing support before service users move into their accommodation, in order to build a relationship and prevent disengagement and tenancy breakdown. Service users are also fully involved in the process of identifying appropriate accommodation; this engagement is vital both in building their skills, and in ensuring that they are fully committed to their tenancy. The service has also developed a relationship with a local trust who provide some properties as a philanthropic landlord.

It can take a couple of months to identify a suitable property and this can be difficult for some service users living in unstable accommodation. Equinox has now set up a shared house to bridge this gap and to offer further opportunities for engaging with service users and assessing their independent living skills, before they move into the private rented sector.

Increasing the pool of lettings through social enterprise: Broadway's Real Lettings, Path's Plymouth Homes 4 Let

Path’s Plymouth Homes 4 Let, a Spark Challenge winner in 2008, and Broadway’s Real Lettings in London, are examples of social enterprise lettings agencies run by homelessness organisations. This is a way that homelessness services can sell their expertise in housing management and tenancy support, whilst ensuring that homeless service users have access to the private rental market and a lettings agency that understands their needs. Landlords are attracted to an ethical and professional service with low voids rates. By charging landlords a commission for the letting agent to identify tenants, set up the tenancy, manage rents, and deal with repairs and day to day issues, the agency can become financially sustainable.

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