A scheme in London offering workers an interest free loan to pay for their deposit on a rented home is being rolled out across the country.
The scheme was pioneered by housing and homelessness charity Shelter and the Mayor of London last year, with the Department for Communities and Local Government becoming the first in Whitehall to adopt it and securing cross-Government support to introduce it. It is backed by housing minister Brandon Lewis and works like the season ticket loan programme already offered by many employers to help commuters pay for their travel costs.
At an event to roll out the scheme today, it was announced that The Co-operative Group will be the first major employer to offer it to their 70,000-plus employees across the UK. The initiative is also being taken up by the Department for Communities and Local Government, The Confederation of British Industry, London First and the London Chamber of Commerce, among others.
As housing costs put pressure on renters’ finances, the Mayor and Shelter are now calling on employers throughout the capital and the country to adopt the scheme.
Renters in England pay an average of over £1,200 for deposits when they move into privately rented homes, according to recent research. In London, the average rental deposit is £1,859. The sector has nearly doubled in the country in the last ten years and there are now more than 9 million renters nationwide.
The Mayor of London Boris Johnson said: “Many people living in private rented accommodation are forced to borrow money to pay for their tenancy deposit and are put in debt before they have even moved into their new home. By rolling out this scheme nationally we will be able to ensure that employees can secure a home without enduring unnecessary financial difficulty. This is the latest part of my comprehensive strategy for the private rented sector and follows on from the London Rental Standard which was launched last year to help millions of Londoners rent with confidence.”
Shelter chief executive Campbell Robb said: ”Finding the money to pay for a deposit shouldn’t stop someone from getting a home for their family, but as the cost of housing keeps rising, more and more people are struggling to do just that. That’s why, after we successfully piloted the scheme for our own staff last year, we’re now calling on employees across the country to do the same and help their staff move home without breaking the bank.”
Housing Minister 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 Co-operative Group Chief Executive, Richard Pennycook said: ”For colleagues looking to rent their own home, raising the money for a deposit can be a real stretch. We are delighted to offer this helping hand to our colleagues and fully support this initiative.”
The scheme was launched today at The Co-operative in St. Pauls, London. The event was attended by Housing Minister Brandon Lewis, Deputy Mayor of London for housing Richard Blakeway, Steve Hammett and Adrian Shooter of the Co-operative and Shelter chief executive Campbell Robb.
While the scheme can be adapted by different employers to suit their needs, in principle, 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 further information on the scheme, including details for employers on how to sign up, please email firstname.lastname@example.org.
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