Landlords deserting private rentals for asylum HMO contracts
Owners are increasingly opting for Home Office-backed deals that offer guaranteed income and reduced management responsibilities.
Landlords are being lured away from traditional lettings in favour of lucrative contracts with asylum accommodation providers, driven by guaranteed rents and fears over incoming rental legislation, it has been claimed.
Paul Shamplina (pictured), founder of Landlord Action, told i-Paper that many are now signing deals with Home Office contractors such as Serco, Mears Group and Clearsprings Ready Homes.
He says: “Landlords are fearful of the bill, and some are turning to this scheme. The legislation is definitely a factor.”
Under the deals, landlords are signing long-term leases of three to five years with providers who take on all management, maintenance costs and utility bills while paying guaranteed monthly rents with no void periods.
With the Renters’ Rights Bill, there’s a fear that you’re not going to be able to regain control of your property.”
Wendy Whittaker-Large, who runs the HMO Action Group, says she knows dozens of landlords who have agreed leases with asylum providers, with many citing concerns about losing control of their properties under new eviction rules.
“With the Renters’ Rights Bill, there’s a fear that you’re not going to be able to regain control of your property,” Whittaker-Large says. “So, when an email comes from Serco or other operators, these five-year contracts with guaranteed rent are becoming more attractive.”
The trend is being given a boost by property influencers on social media platforms who are promoting asylum contracts as more profitable. Although the room rates (£400) are below private averages of £450 to £460, the contractors cover all maintenance and bills.
Community cohesion fears
However, Red Wall Labour MPs have raised concerns that asylum accommodation is concentrating in some of the country’s most deprived areas, where the housing market is already under severe pressure, with Bassetlaw MP Jo White calling for existing contracts to be ripped up.
And Maxwell Marlow of the Adam Smith Institute warns the push towards asylum HMOs is “a tinderbox that will go badly wrong” as housing-strapped residents see properties being taken out of the regular rental market.
The shift comes as councils nationwide face a growing resident backlash against high concentrations of HMOs, with local authorities from Portsmouth to Darlington implementing stricter planning controls amid complaints about overcrowding and anti-social behaviour.
A Government spokesperson says it is looking at alternative asylum housing options, including disused accommodation and ex-military sites, to reduce community impact.
I can only speak for my own experience and once you sit down with a landlord and explain the “known” facts of the new bill and they appreciate how they can obtain possession if they want to sell or move in the vast majority are comfortable because they are looking medium/long term.
The bill is coming we cannot fight it we need to educate ourselves as agents and our landlords how to live with it and how we can use it to the best advantage.
I would think the best way to lose control of your property (I accept I have not seen the contract) is to sign it away to one of the corporate giants making millions from your property. It is tempting because they are paying over market rates but this hopefully will not last.
Working with your landlords – provided you have the knowledge – will help you retain the vast majority. We have lost property this year but we see this every year and it is no worse than an average year but our portfolio has grown as many self managed landlords are now looking to have a good agent with fully trained staff manage the property/portfolio.