Updating post from Reddit.
I work for a council guaranteed rent scheme offering full management, guaranteed rent, servicing covered, minor repairs covered and property hand back in same condition. These schemes seem to get a bad rep among landlords. Interested to hear from LL point of view what puts you off? What would help encourage you to these schemes? How we could market better?
By way of background, I am a landlord of some 25 years and have entertained a lot of these schemes by various London councils, who in the face of it make the scheme look very good. The truth of it is that the council provide zero management, the damage caused by the tenants is far beyond minor and the properties are NEVER handed back in the same condition. We would consider these schemes as are first sign of trouble the councils run for the hills and tell the tenants to stay put when we start eviction proceedings. I am afraid these schemes will not attract any decent landlords
There is different levels offered some councils will find you a tenant, others offer the full management and some are in between.
Because when you get ahold of the property your promises are worthless.
There are normally very common problems with these schemes.... The biggest one, management is never there... The teams who run the management side are overworked and underpaid, and it takes MONTHS to get things sorted.
I would say this is dependent on the local authority, not the general idea of PSL schemes
We rented one to one of these schemes whilst we worked abroad. They handed the property back with over £50k worth of damage to it in less than a year.
Solid walnut parquet floors completely destroyed, holes drilled everywhere, , kitchen in bits, beautiful original Victorian minton tile path destroyed. Door frame damaged so badly the whole frame collapsed when we opened the door.
Never, ever again.
OMG , sounds like a disaster !
It was absolutely heartbreaking. So much love and care had gone into the house. It was supposed to be our long term home. It was a Beautiful victorian house.
Council rented it out to a company that housed troubled care leavers.
They took thier frustrations out on the house and tbh it was the sheer lack of care that did most of the damage. The old walnut floor had survived heels, dancing general living and a couple of floods in its 150 years. In less than a year it was damaged beyond repair.
We thankfully were phoned by our neighbours who were having problems and were asked if we knew what was going on in our house. We took back the house as fast as we could after finding out
Very sorry to hear that. Councils and those rent-to-rent schemes (that is if they are kind enough to tell you upfront) are a straight no because the risk is just way to high.
Did the council at least make good on the damage caused ?
Would the head of your department be willing to act as a guarantor on behalf of the tenants?
So not guaranteed rent but an actual guarantor. If not then that kind of tells you that they don't trust the tenants they themselves are providing.
I'd want the ceo of council willing to put their council down as a guarantor. Have skin in the game so to speak.
Would managers at private lettings agencies do the same? The scheme covers guaranteed rent and property handed back in same condition minus wear and tear. This covers all aspects no?
The rents were shocking compared to what you'll actually earn on the open market
12 years ago I rented my ex-council flat to the local authority via a Private Sector Leasing scheme which offers guaranteed rent, it was the only way I would be able to rent the property as its in a bad area and it was going to be difficult to sell.
While its been lucrative it has not been without problems.
The council my scheme run does not really do full management, I have to cover G2 yearly, provide British Gas Homecare 4. I was not expecting them to cover these but it does suprise me as I thought the council would be able to do it more cost effectively
The main issue is the selection of tenants, every couple of years they call me in to refresh and they expect me to cover all the damage that has done so we get into an argument over what "handed back in same condition means". I recall the council asking me to pay for replacement kitchen door so I politely asked them where was the original and they backed down. Its not that they are trying to to be bad, they are just inept. All this for below market rate rent.
So, if like me you have an undesirable property that can't be rented on the open market then sure, a council guaranteed scheme is fine but you have to demonstrate that the properties and tenants are managed better.
edit:
I wanted to add that going above and beyond on regulations is painful when they also don't pay market rate.
9 months of lost rent plus court fees and eviction costs to get rid of the so called "guaranteed rent" tenants from the council.
Bond replacement for the deposits completely worthless.
Not to mention the 63k in remedial costs and free labour from myself to get it back to a liveable condition.
That obviously wasn’t a guaranteed rent system if you had to cover lost rent and court fees
That's the issue. It was called guaranteed rent and advertised as such.
Never trust a council.
There was also the issue that it massively narrowed your mortgage options as most lenders want a normal AST in placem Soon as you add a lease or something in then your costs increase.
It was a 12 month lease with Bristol council for guaranteed rent. Extended it once before it all went tits up.
Also if you ever try to sell - no bank will offer a mortgage to a buyer so it’s cash only and cuts your market down
What about companies like Serco or Mears? Does anyone have experience working with them?
Its been said already in this thread, but your promises are worthless. The only way it would be somewhat tempting is you paid way above market rate, let the landlord find a solicitor who will write a contract of returning the property in a good state, actually manage the property completely with repairs paid and any social/domestic problems are also your responsibility. I would also include a whole segment on habitability concerns such as mould and damp would be your problem to rectify (because lifestyle choices are the Landlords fault) and any council inspections failure will be down to your negligence.
So when it eventually ends in tears the Landlord doesnt make a huge loss as the council has assets that can be taken. Which they will be.
Nah still not worth it, probably take months in court will be a further loss.
Do you have horror stories and good stories to share ?
Horror story - LL didn’t renew her insurance, had a flood, 25k damage that we couldn’t do anything about. Day to day things run fine we monitor and visit tenants regularly, landlords are happy, handbacks usually require some paint work and floor coverings replaced nothing major.
I am thinking of doing this myself soon so would like to know the pitfalls
Did this once with Enfield council about 15 years ago. In 2 years the tenants they placed and who had to be evicted eventually, did 18k worth of damage to property. Which the council's own surveyor estimated.
Dealing with the council during the tenancy and after was nothing but grief.
They were then so incompetent that they sent the survey with the estimate to us with a cover letter that said they were offering 9k for damage. Like they were trying to negotiate but had attached too many bits of the case file.
Later when we sent back their own surveyors estimate to request the full amount they accused us of stealing commercially sensitive information. Absolute clowns.
Honestly wouldn’t - the council staff job titles are “housing support officers” they work for the tenant and NOT you…. They don’t understand this and charge you over the top for everything and the service if horrid - you are merely in their way…. And if you push back they have a hot line to the council inspectors who will throw the rule book at you and claim it’s all your fault…
I work for my landlord before the tenants. My job is to look after our properties.
If you’re looking to purchase based on PSL schemes available just chose your authority wisely
I live next door to such a house (block of 4 tiny flats). Landlord is in every few months painting or replastering, resetting fire alarm, fixings a flood, broken furniture, its endless. I can see the stress on his face as he's walking up and down the drive on the phone to whoever it is saying they f'cking done this, f'cking done that, etc.
AVOID
If the landlord is in doing the work then it’s obviously not a managed PSL scheme
Having dealt with several, every council seems to define wear and tear far above what any deposit scheme would, and the rents tend to be lower than you could get from an open market tenant, even when you factor in paying for private rent and legal cover.
