The Home Office sparked fresh controversy over the weekend when it formally called on landlords to house asylum seekers to help cope with a record number of migrants.
Serco, one of the three private contractors working for the Home Office, has offered landlords five-year guaranteed full rent deals at the taxpayers’ expense if they agree to house asylum seekers, according to reports.
More than 8,000 migrants have arrived in the UK this year after crossing the English Channel in small boats reached, according to the Home Office.
Serco, in a website page titled “calling all landlords”, said it was responsible for more than 30,000 asylum seekers in an “ever growing” portfolio of some 7,000 properties.
“Our operating model is based on leasing properties from a wide network of landlords, investors and agents with Serco acting as a tenant,” the website page states.
Landlords interested in the five-year lease have been invited to a Serco event at a hotel in Malvern Hills, Worcestershire, next month, The Daily Telegraph reported. They are reportedly seeking landlords with properties in the north west, the Midlands, and the east of England.
Serco said: “We are confident that our lease provision offers an attractive and competitive proposition within the industry.”
The firm is offering to pay rent, as well as full repair and maintenance, free property management and utilities and council tax bills paid by Serco.
Housing migrants in private rented accommodation is dramatically cheaper than in hotel accommodation. The Institute for Public Policy Research think tank estimated a hotel stay costs the taxpayer £145 per night on average, compared to £14 for private rented accommodation.
A Home Office spokesman told the press: “We have a statutory duty to support destitute asylum seekers who will not be able to pay for fees such as utilities and council tax.
“We are restoring order to the asylum system and cutting costs to taxpayers by reducing the number of people we are required to accommodate through a rapid increase in asylum decision-making and the removal of more than 24,000 people with no right to be in the UK.”
Moving numerous young undocumented and unsupervised men into HMO’s next door to families must be the final straw. Few, if any of these men will be working – how will they spend their day?
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So, having persecuted landlords for years, imposing umpteen regulations and massive fines for any infraction, the Government wants landlords to help with a problem of their own making. With landlords leaving the sector in droves, why would those who stay in the market take illegal immigrants? The Home Office will have to pay well over market rent.
The tenancy may be guaranteed for 5 years but prudent landlords should be wary. If the property becomes an HMO the landlord needs to be clear who is applying for the licence and what works to the property are required. I expect SERCO will make the landlord responsible for physical alterations. Having to retrofit fire doors, fire alarms in every bedroom and perhaps fire proof plasterboard on staircase ceilings can be costly.
Landlords should also bear in mind that their insurance needs to be renewed annually. Insurers need to be notified of the change of use and the initial premiums are likely to be be two to four times normal. Depending on the conduct of the tenants and any damage the premiums could shoot up in future years.
I am aware of a case (in a house with released prisoners who caused a fire) where the premiums increased ten fold from one year to the next! It might be impossible to find insurance. I expect there is an obligation to insure and a limit on SERCO’s liability for damage caused by the occupants.
Landlords with mortgages should check they are not in breach. An HMO is treated differently by lenders from a standard BTL.
In addition, the Government regularly imposes new burdensome laws on landlords so – to anybody thinking of taking part – don’t be surprised if HMG stiffs you later, for example by re-basing the generous rent to a lower figure. Receiving a market rent (instead of the initial above market rent) but paying £3000 a year for insurance won’t look like such a good deal.
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Who said the government had no sense of humour?
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