Pendle Bond Guarantee Scheme

Responding to emergency housing need in an area of low demand

Pendle is a small borough of Lancashire in the North West that has no emergency accommodation for single homeless people. The area has high levels of private rented sector voids (6.8%) and large numbers of private landlords (11.7%), therefore the council set up a bond guarantee scheme in 2006 to facilitate fast access into housing for homeless people. 217 people have been helped into housing since then.
 
Applicants must be aged 16 or over, be on a low income, unable to raise a bond, be homeless / threatened with homelessness and have a local connection with Pendle. Pendle does not have high numbers of rough sleepers but it does have many 'hidden homeless' people, for example those who are 'sofa surfing'.
 
This Bond Guarantee Scheme is designed to help people secure rented accommodation in the private sector when they cannot afford to pay a bond. If eligible, the scheme will offer landlords or letting agents a written bond guarantee of £150. This figure is sometimes higher depending on the circumstances. This means that if at the end of the tenancy there is loss, damage or theft from the property, Pendle Borough Council Housing Needs will reimburse them up to the value of the guarantee. It does not cover rent arrears. On occasion, an applicant may be able to sign-up within a few days of seeking accommodation.
 
The scheme is funded through the Council's homelessness prevention funding. It is a very low cost scheme that so far has only paid out £3,000 to landlords who have claimed for damages to their properties.
 
The Council does not currently inspect prospective landlord’s properties beforehand. The applicant is free to find their own accommodation using up-to-date lists of available properties in the area including bordering areas. If the individual has support needs or is not comfortable looking for their own property, the Housing Needs team will provide additional support, or the council's generic floating support service will help them to find suitable accommodation. These support services will also help the person with arranging benefits furniture etc.
 

Key steps to establish the project

  • While a small bond scheme which provided cash bonds had been in existence since 2004, eligibility for this scheme was very restricted due to the costs incurred.
  • The new bond guarantee scheme was set up to benefit a broader range of clients, including single homeless people.
  • The Government's homelessness prevention agenda and targets around reducing temporary accommodation influenced the Council to develop the scheme.
  • The Council had previously spent a lot more money paying for homeless people to access temporary accommodation and B&Bs.
  • The Council underwent a stock transfer of housing and it made sense to tap into the large private rented sector in the area.

 Lessons learnt

  • It is important to develop a good reputation with landlords so they know that you will pay out the bond if the property is damaged and not argue over small details.
  • It is good to initially keep the scheme very simple in terms of administration costs and time.
  • Be proactive in ‘matching up’ landlords and prospective tenants.
  • It is important to offer bonds at a level which helps the maximum number of people whilst remaining relatively competitive.

Key message

The PBGS model has proved to be an efficient use of resources, having paid out only £3,000 since it began in 2004. Importantly, it also offers the client a strong element of choice, as they choose their property from a list of locally available houses. The scheme is less costly than the previous strategy of using bed and breakfast accommodation for short term crisis situations. However projects such as this rely heavily on the quality of relations with landlords, and practices such as ‘matching’ prospective tenants to landlords is strongly advised to minimise friction between the two parties.