All of Whitehall has now agreed to offer tenancy deposits loans to Government staff looking to take up new tenancies in the private rented sector, following in the footsteps of the Department for Communities and Local Government. This includes the Home Office, Ministry of Defence, Department for Work and
Pensions, HM Revenue and Customs and the Department of Health.
A similar scheme is to be offered to all staff at the Co-operative group to help their employees moving into rented property and struggling to raise cash for a deposit. The Coop scheme is in partnership with Shelter, the Greater London Authority & the Department of Communities & Local Government (DCLG).
Housing Minister Brandon Lewis announced government-wide support for the new scheme Wednesday that will become available to help thousands of tenants.
The minister said he was determined to “create a bigger, better private rented sector”.
The scheme, which works in the same way as a staff season ticket loan, will allow Government employees to borrow some of their salary upfront in order to pay for rental deposits, which is then repayable from salary payments over up to a year. It is available to be taken up in both the public and private sectors.
The Department for Communities and Local Government last October became the first government department to roll the scheme out to its staff, with ministers pushing other parts of government and the public sector to follow suit. The department is working with the Department for Business Innovation and Skills to increase availability across the private sector.
Brandon Lewis said:
“With millions of people across the country renting their home we are determined to create a bigger, better private rented sector that is fair to tenants.
“Today’s move will mean thousands of people will be offered a helping hand to rent privately through season ticket style loans from their employers.
“I hope to see more employers in the public and private sector joining the scheme in the near future.
“The scheme was created by the homelessness charity Shelter and the Greater London Authority was another public body to introduce the scheme for its staff.
“The tenancy deposit scheme can be adapted by different employers to suit their needs, but generally employees are offered interest-free loans to pay their deposits when they move into a privately rented home, which are then paid back through their salary over the course of up to a year.
For the Co-operative Group Adrian Shooter, director of resourcing and diversity, has said:
“House hunting and moving home are stressful times, and if you’re renting, having to find a hefty deposit can be a big ask and pile on more pressure. At The Co-operative, we regularly look to find practical ways in which we can support our colleagues, outside of their normal pay and reward benefits. So, when Shelter approached us with this innovative way to provide real assistance for people struggling to find these deposits by offering interest-free loans, we were delighted to get involved.
“With more than 70,000 employees across the country, a large number of our colleagues are likely to rent houses from private landlords and this new scheme will be invaluable for them. According to research by My Deposits, renters in England pay an average of £1,200 for deposits when they move into privately rented homes. For the vast majority of people, this kind of money isn’t readily available at your fingertips.
“The number of people renting is increasing rapidly, and we want to make sure we’re responding to our colleagues’ needs as people’s lifestyles change.
“In terms of providing these interest-free loans, we’ve worked really hard to ensure we turn the application around within five days, and pay the money straight into the employee’s bank account. This means people can receive the cash quickly and easily, which is vital when there is intense competition for properties, as is often the case, and you need to act fast to secure your new home.
“As a responsible employer, we’ve taken the decision to enable employees to borrow a maximum of 80% of their four-weekly pay, as we think this is a sensible amount for people to then pay back in equal payments across the year. The scheme is open to all colleagues who have completed their probationary period, and who aren’t leaving during the loan period.”
The Government departments that have agreed to introduce the scheme include:
Home Office, Foreign and Commonwealth Office, HM Treasury, Department for Work and Pensions, HM Revenue and Customs, Business Innovation and Skills, Ministry of Justice, Ministry of Defence, Department for Education, Department of Health, Department for Transport, Department for the Environment, Food and Rural Affairs, Department for Energy and Climate Change, Department for Culture, Media and Sport, Cabinet Office, Department for International Development and the Treasury Solicitors.
Under the DCLG scheme, staff can request a loan (by way of an advance of salary) in order to pay a deposit when moving into a privately rented home. The loan is conditional on the deposit being secured through a tenancy deposit protection scheme, and staff pay back the loan through deductions from their monthly salary across no more than the following 12 months.
The department has worked with Civil Service employee policy colleagues to produce guidance that can be adapted by other organisations looking to implement deposit loan schemes.
— LandlordZONE (@LandlordZONE) February 4, 2015