Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.

Private Sector Leasing – Someone has told me that I can let my house to the local authority which will save me a lot of trouble renting it out myself. Is this correct and if so what are the pros and cons of doing this?

It is correct that some local authorities and also some Housing Associations and Management Companies on their behalf operate what are known as Private Sector Leasing (PSL) schemes.

Councils have an obligation to house people who are in need so they regularly and increasingly need this type of emergency accommodation. People can become homeless for a variety of reasons so re-housing families is a common situation. Two and three bed houses are most commonly in demand for these schemes.

This means that private landlords with properties to spare can lease their rental house to one or other of these organisations. In return the landlord gets a guaranteed rent amount and usually a longer rental period.Does this sound too good to be true for landlords? Well, these schemes can be a good thing for certain types of landlord, but there are some disadvantages as well – there’s no such thing as a free lunch in this world!

The main advantages are that the rent will always be paid and on time, there is no need to use a letting agent and there will be no void periods for the landlord – even when the property is vacant the landlord will still be paid rent. The property will be professionally managed and maintained, though the landlord will usually be responsible for external and structural repairs and for insuring the building.

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The main downside is that rents are set below market levels (usually around 15% to 20% below) to reflect the fact that the property is managed for you. The property should be returned in good condition subject to normal wear and tear but landlords sometimes worry about the quality of the tenants. In the main these fears are unfounded and most landlords have a good experience with PSLs – it’s in the councils’ interests to place tenants that can maintain a tenancy.

Landlords should always carry out due diligence before entering into any contracts, especially with untried management companies or housing associations. Read the small print and do company checks through a referencing agency. Ask to speak to other landlords who have dealt with them before.

©LandlordZONE All Rights Reserved – never rely totally on these standard answers which apply primarily to England and Wales. Before taking action or not, always do your own research and/or seek professional advice with the full facts of the case and all documents to hand.

Please Note: This Article is 9 years old. This increases the likelihood that some or all of it's content is now outdated.


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