Portsmouth City Council scraps loan scheme for private tenants after no backer can be found
A PILOT through which interest-free loans would be provided to help people move into private rental housing has been abandoned after negotiations to find a lender failed.
Talks were held with credit unions deemed suitable to provide the service but none agreed to take part and Portsmouth City Council has now formally closed the project.
Cabinet member for housing, councillor Darren Sanders, did, however, approve a new bond scheme on Monday through which council funds will be used as guarantees to landlords on behalf of people who cannot afford deposits.
Pilots for both were brought forward in January last year as ways of helping people move into private rented housing.
Covid-interrupted negotiations took place with an unnamed credit union to provide the loans but its board decided against providing the service.
Cllr Sanders said the council ‘had tried everything’ to get the scheme up and running but said there was now no alternative to abandoning it.
‘If they don't want to do it then there's not much we can do,’ he said.
‘The council could do it but we've already had a report saying how difficult that would be. We have potential funding pressures coming down the line so I don't think that would be sensible.'
Conservative group housing spokesman, Cllr Scott Payter-Harris said he did not expect the idea to be revisited.
‘I'm not surprised this has happened,’ he said. ‘It was always going to be difficult to find someone to offer unsecured loans.’
Despite the decision to shelve this, Cllr Sanders has approved the launch of a one-year pilot of the bond scheme which will be funded through the use of just under £86,000 of reserves.
‘Helping private tenants is something we, as an administration, said we were going to do,’ he said. ‘This is a good way of getting people into the private rented sector and I'm delighted we've been making progress with that'.
Labour spokesman for housing, councillor Cal Corkery, said the project was ‘encouraging’ but urged the council to consider how it could mitigate ‘savage cuts’ to Discretionary Housing Payments.
He said the council should make up the difference caused through the reductions announced by the government earlier this year.