Dorset Council is controversially offering landlords ‘golden hello’ payments, no fees and free management support to encourage them to bypass traditional letting agencies.

Its Key4Me scheme has been specifically developed to help those who are either homeless or threatened with homelessness. It charges no fees to landlords while providing tenant matching, legal tenancy agreements, property inventories, compliance checks and ongoing management support.

There are also welcome bonuses, which are paid over 18 months – up to £4,000 for one-bedroom properties, £2,250 for two-bedroom, £3,250 for three-bedroom and £4,250 for four-bedroom-plus properties.

No upfront costs

The council also provides five weeks’ rent in advance and handles all upfront costs that typically fall on landlords, including deposit guarantees worth up to 12 weeks’ rent, arrears bonds, inventories and pet bonds of up to £400. In addition, all tenant deposits are managed by the council rather than the landlord.

In addition, each landlord gets a named Tenancy Sustainment Officer, who will respond to support requests within five working days and will ‘work with both sides to resolve any issues’ throughout the tenancy.

Dorset Council adds that landlords will still retain full control over tenant selection and can conduct whatever checks they feel necessary, but must offer Assured Shorthold Tenancies of at least six months, or twelve months if a Landlord Welcome is agreed, and cannot increase rents for the first 18 months.

We are turning the market on its head and proving that there are successful alternatives to expensive agencies.”

The scheme has now reached the milestone figure of 100 re-housings into the private sector.

Cllr. Gill Taylor, said she was delighted with the progress of the Key4Me initiative: “We are turning the market on its head and proving that there are successful alternatives to expensive agencies or sourcing your own tenants.”

Several councils are running similar but more mainstream schemes – City of York’s YorHome agency offers landlords 9% management fees plus 12 months’ rent upfront and the fifth year’s fees free. Salford Property Link does the same but offers 10% management fees and a rent guarantee scheme for 15%, and Wigan also operates a council-run agency that provides uninterrupted monthly income in exchange for long-term leases.

As was reported in The Neg, the schemes have not always gone down well with local agents, with John Redden, Partner at Belvoir in Tynedale, Northumberland, saying: “Is this really what the business people pay their business rates for to fund the council to undercut them?”