Full Breakdown
Rising Incentives for Private Landlords Amid Housing Crises in England and Scotland
9/2/2025, 4:13:11 AM
Increasing Financial Incentives to Landlords in England
Local authorities across England are increasingly resorting to financial incentives to private landlords to house homeless families, with 37 councils spending over £31 million on such payments in the 2024-25 fiscal year. This data, gathered by the campaign group Generation Rent, reveals that councils are offering one-off cash payments to landlords on 10,792 occasions, reflecting a significant rise in spending—54% since 2018. Manchester City Council led the expenditures with £3.3 million, followed by Enfield (£2.7 million) and Ealing (£2.3 million). The highest single payment recorded was £15,385 by Southwark Council.
Ben Twomey, chief executive of Generation Rent, criticized this approach, labeling it a "senseless waste of public money." He attributed the councils' predicament to the soaring rental costs and the government's freeze on local housing allowance rates, which has left them in a challenging position to avoid placing families in temporary accommodations.
Context of the Housing Crisis
The situation in England mirrors broader housing challenges, particularly in Scotland, where over 12,000 homes have vanished from the official landlord register since the COVID-19 pandemic. The number of active private landlord registrations in Scotland has dropped significantly, with a 23-year high in the number of homeless households and children in temporary accommodation. The Scottish Tenants Organisation has called for a substantial increase in affordable housing construction to address this crisis.
Criticism of the Current System
Critics argue that the incentive payments to landlords are a flawed solution to the housing crisis. Chris Norris, policy director at the National Residential Landlords Association, acknowledged that while these incentives help landlords cover costs and allow them to take on tenants who may pose a higher risk, they are not a sustainable long-term solution. He emphasized the need for a welfare system that enables people to access housing without relying on such incentives.
Campaigners have raised concerns about potential abuses of the system, where landlords might exploit councils by issuing eviction notices to gain further payments. Grace Williams from London Councils noted that the capital is facing an extreme homelessness emergency, making it imperative for local authorities to work with private landlords to secure better outcomes for homeless families.
Official Responses and Future Implications
Local authorities defend the use of these incentives as a pragmatic response to the overwhelming demand for housing. Birmingham City Council described the payments as necessary, given that over 25,000 individuals are on the housing register. Ealing Council highlighted that these payments assist homeless households in overcoming barriers to accessing the rental market.
As the housing crisis continues to escalate, the Scottish Government has been urged to implement an emergency housing action plan. The Scottish Tenants Organisation has proposed a manifesto that includes increasing the budget for affordable housing and building tens of thousands of public sector homes.
Verbatim Quotes
- “The soaring cost of renting and the government’s decision to freeze the Local Housing Allowance has put councils across the country in a near impossible position.” — Ben Twomey, Chief Executive, Generation Rent
- “He told the Guardian: “Frankly, it does a job and it’s probably the least bad option available to a lot of local authorities at the moment.” — Chris Norris, Policy Director, National Residential Landlords Association
- “We are in the last chance saloon in Scotland with a housing and homeless disaster happening before our eyes which is exemplified by the dire decline in the number of landlords and private rented homes in Scotland.” — Sean Clerkin, Campaign Co-ordinator, Scottish Tenants Organisation
The ongoing reliance on financial incentives for private landlords raises critical questions about the sustainability of current housing policies in both England and Scotland, as local authorities grapple with the complexities of homelessness and the rental market.
