London Council Opens Letting Agency

I am based in Milton Keynes and Harrow Council put an ad in our local paper a few months back advertising their services which I responded to. I had a very positive conversation with a member of staff there.The scheme is very appealing. They are certainly forward looking and were looking to place their residents up in MK where the LHA rates are lower than theirs. This far exceeds the imagination and level of service currently offered by MK council although there are tentative signs that my council is beginning to try and work more closely with the PRS and up its game. My e mail was actually answered within 24hrs recently rather than the 6 weeks or so it was taking on some matters!
 For me this is definitely the way forward and I can envisage in time the councils and the PRS being very much in tune with each other in a symbiotic union which can only benefit councils, landlords and tenants alike. There is no reason with the resources they have at their disposal that they can not also manage the whole tenancy and maintenance. Economies of scale would be beneficial and bring peace of mind to all. I can see a rent and maintenance  guarantee scheme evolving so an LHA landlord would have a fixed rate of return on their investment. This would encourage otherwise reluctant landlords to consider investing in the ex local authority estates and  entering the LHA market with confidence. This would bring much needed extra housing into the system and enable councils to reduce their waiting lists considerably. I hope Harrows template is rolled out nationwide and extended and refined as it grows. This is the way forward and not before time.

Yes I totally agree with the strategy.
It could even encourage me to let to LHA claimants!!
Taking the risk of claims being rejected and then recovery from the LL is a big disincentive to take on LHA.
It looks like they are addressing these very issues; so I can see a reduced rent offer with a long term tenancy most likely would become extremely attractive to PRS LL.
Now where is that is that list of cheap ex-council property gone!!?

Well I know a man from Milton Keynes who purchased a big chunk of it there LOL

If only most mortgages did not prevent landlords agreeing to
anything over 1 year and also did not stop landlords renting to DSS, we could
be getting close to a solution that worked well for everyone.

Do you think to encourage supply the councils might offer to remortgage the LL's property with their own money but not have any restrictive clause in the mortgage as the mortgage t & C's would be drawn up by the council themselves.
That way they could guarantee a ready supply of PRS properties available for rent for long periods.
If the lenders won't supply products to assist renting to LHA claimants then councils will have to use their financial muscle to assist LL to rent to LHA claimants.
It could save a fortune for the council and they might be able to offer attractive rates to LL's providing they rent to the council.
These mortgages would be conditional on having to rent to the council.
Councils can lend at a cheaper rate but still make a profit out of the lending.
What would be the problem.
It would put a few lenders noses out of joint; but hey so what........!!!
They haven't done us any favours!

Where would the Councils get the money from to lend out though Paul? There are specialist commercial lenders out there that will fund these though.

Isn't the issue that appears to be that lenders as Ian suggests do not alow LHA claimants to be tenants.
Therefore I was thinking that the lender of last resort who would not have such strictures for obviuous reasons.
Clearly if there are specialist lenders who will allow LHA tenants that needs to be made known to LL.
It seems from what Ian is saying ; and I have to say that is my experience as well that lenders won't allow LHA claimant as tenants.
If you know of any lenders that do allow LHA tenants I am sure that quite a few LL would be interested in knowing of them particularly in light of these council letting services.

Finite criteria changes are happening all the time amongst all lenders Paul. They always seem to have a pot of money to test new things. When I was running The Money Centre I was always "in the know" about these things as a result of networking with their high level underwriters and Directors and through events like the CML and IMLA Dinner. I'm out of touch these days though and that's why I was so pleased to see GreyHairedMortgageBroker commenting on this site. I don't know his identity but based on his posts I suspect he is also still "in the know". When lenders want to test a new market the underwriters will be given a tranche of lending and  discretion on how they use it by their Directors. They will in turn share that with their closest most trusted mortgage broker contacts on the strict understanding they will not publicise what's happening but that the brokers can share this with their most trusted and respected clients. It was relationships like these which kept the largest portfolio landlords coming back to The Money Centre. It's what I think GreyHairedMortgageBroker was eluding to in his posts I beleive. Let's hope he comes back to comment again.

Well well well, so the authorities are taking management control of the letting market, does this particular department's office have a large red flag with a hammer and sickle on it flying from its roof ?