Tenant Fees Bill

Written evidence submitted by the Refugee Council (TFB38)

The Refugee Council is one of the leading charities in the UK working directly with refugees, and supporting them to rebuild their lives. We provide a range of different services and projects to directly support refugees, as well as campaigning and undertaking advocacy to improve the conditions for and treatment of refugees in the UK.

Executive summary and main recommendations

1. The provision within the bill to cap tenancy deposits at 6 weeks of rent is too high, and will mean many groups of renters, including refugees, will continue to face difficulties in accessing a tenancy. As proposed by a range of housing organisations, we believe a cap on tenancy deposits should be significantly lower than this, and the bill should be amended to reflect this.

2. Government should underwrite a national tenancy deposit scheme for newly-recognised refugees, to ensure they are able to access the private rented sector wherever they are in the country, avoiding possible homelessness and supporting their integration into British society.

3. In the absence of a national tenancy deposit scheme, government should review the use and provision of integration loans for refugees, ensuring they are sufficient to meet the levels of the legislated cap on deposits that results from the Tenant Fees Bill 2018. The administration of integration loans should be reviewed to ensure that applications for loans are processed and approved in a timely manner.

Background and context

1. Housing is perhaps the greatest source of anxiety for newly recognised refugees. Those who come through the asylum process and are granted refugee status, are then given 28 days to leave their asylum accommodation and to find a new home.

2. Refugee Council research has shown that finding suitable and affordable accommodation within or directly following the 28 day period is a major challenge both practically and psychologically. In England’s Forgotten Refugees, interviews with 100 refugees who accessed Refugee Council’s ‘Refugee Advice Project’ found that 81 were homeless or about to be homeless at the point that they accessed the service. [1]

3. Low levels of asylum support (the welfare benefit that the majority of asylum seekers access to cover living expenses) and the fact that most asylum seekers are not able to work, inevitably mean that recently recognised refugees begin their new lives in the UK with minimal or no savings.

4. With no credit history, serious difficulties in opening bank accounts and a likelihood that they will not be in employment, accessing financial support from banks through loans is improbable. This is compounded by often limited social networks which decreases the prospects of borrowing money for rent in advance and deposits for private rented accommodation.

5. In addition, refugees face all the same barriers that others face in the search for a safe place to live, especially those on low incomes. In many areas there is a critical shortage of safe and affordable private rented accommodation, most significantly in London. The high level of rents and deposits in this market is well-documented, [2] but refugees can also be excluded by the insistence on guarantors for low-income renters, asking for months of rent in advance, or the common practice of refusing to let to benefit claimants.

6. All of these will further disadvantage newly recognised refugees without savings, or friends or family who could act as guarantors or employers to vouch for their financial stability. Taken together, these factors mean that there is a high likelihood of homelessness for many new refugees, as documented in recent research on this issue. [3]

7. Furthermore, this approach to housing for refugees coming through the asylum process stands in stark contrast with the support offered to refugees coming through the government’s resettlement schemes.

8. Local authorities source tenancies for resettled refugees, who are then provided with a home on the first day they arrive in the UK, with a deposit paid and with at least a year’s security, and including specialist support for their access to welfare benefits. This approach is a recognition that secure housing is fundamental for integration and should be facilitated for those that the UK grants international protection to.

Accessing the private rented sector

9. The private rented sector remains the main option available for a large number of new refugees looking to get their own home in the UK. However, newly recognised refugees are unlikely to have sufficient, if any, savings to pay for a tenancy deposit, due to enforced unemployment while waiting for a decision on their asylum claim and low levels of asylum support.

10. In this context, banning letting agent fees and capping a tenancy deposit at six weeks of rent, while welcome, will still mean the cost of a deposit excludes most new refugees from the sector.

11. To date, the policy response has been to allow new refugees to apply for integration loans, which can be used for rent or a deposit, household items or education and training for work.

12. The minimum loan amount is £100 and the maximum is ‘variable’, although guidance indicates an upper limit of £1,000. The typical amount recommended is £500, and this appears not to vary even if it is a joint application from a couple as opposed to an individual. Nor does the guidance suggest variations by region in order to account for the varying cost of living in different parts of the UK.

13. Even if an application is made immediately after a grant of refugee status, it has been widely shown that ongoing delays in the processing of applications makes it extremely unlikely that people would receive their funds prior to the termination of asylum support. The current experience of Refugee Council staff is that applications typically take longer than 28 days and they have known periods when processing times were 2-3 months.

14. Moreover, integration loans are clearly not being granted at sufficient levels to cover deposits in the private rented sector, and will continue to be insufficient under the cap proposed in the Tenant Fees Bill.

15. Shelter have shown that a tenancy deposit cap of six weeks’ rent will mean that renters in England will have to find, on average, a deposit of £1100 (rising to £1800 in London), and that the cap will have little effect in practice anyway, given that most landlords ask for 6 weeks of rent or less for a deposit. [4]

16. Local authorities can also support refugees to access the private rented sector though tenancy deposit schemes, but work by the Refugee Council has shown that in practice these schemes are too often not available to this group.

17. In June 2015, the Refugee Council issued an FOI request to 44 local authorities in England to find out if they ran schemes, what the eligibility criteria were and if refugees had used the schemes. The request found that while refugees are eligible for rent deposit schemes, significant barriers exist which make it difficult for them to qualify for help.

18. There was a common requirement for applicants to be considered ‘vulnerable’, rendering most single refugees or childless couples ineligible. Many local authorities also required a local connection which can be a barrier to those who were dispersed to areas not of their choosing, who then decide to locate closer to relatives, friend and communities following their grant of refugee status.

Conclusion and recommendations

19. The principle of a cap on the level of a tenancy deposit is a good one; if implemented correctly, it can ensure that low-income renters, including refugees, are more easily able to access the private rented sector without getting into debt, or being forced into unsuitable accommodation.

20. However, the provisions within the bill set the cap at too high a level. Instead, government should be seeking a much lower cap for deposits, which would continue to command the confidence of landlords (by covering the vast majority of possible claims against property damage), while making the entry cost to the private rented sector more affordable for refugees.

21. Doing this would also begin to bring deposits down to levels that are closer to the amounts granted to refugees through integration loans. Notwithstanding this, however, government should commit to review the system of integration loans to improve the speed with which refugees receive loans, and to ensure they properly cover today’s deposit costs.

22. Ultimately, though, the most direct way for government to consistently support refugees to access the private rented sector would be through underwriting a national tenancy deposit scheme for refugees.

23. If implemented, this would ensure that refugees are able to access housing wherever they live in the country, avoiding gaps in provision but allowing for different local housing conditions.

24. Such a commitment could be brought forward as an amendment to the bill, or as part of the current policy process being facilitated through the Integrated Communities Green Paper. [5] Ensuring that new refugees avoid homelessness should be part of the UK’s approach to protection, but is also a clear facilitator of integration, and providing refugees with a stable basis on which to rebuild their lives.

June 2018

 

Prepared 4th June 2018