Let your home to the council: Paul Gosling reports on a tenant who could prove ideal

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HELEN SKILTON of Leicester is planning to travel for two years and wants to let her house. She thinks Leicester city council may be the ideal tenant.

Councils around the country are now renting homes from private owners and using them to house homeless people who are waiting for permanent council accommodation.

The homeowner may not know who will be living in the property but the councils undertake to repair any damage and to pay the rent, so the homeowner should have no problem with bad debts.

Helen Skilton likes the idea. 'I don't want to sell my house, because I don't know where I'll be in two years, and it's a bad time with the recession. I want to rent it out and could do it privately, but I think that estate agents are a bit of a rip-off, and I don't have anyone in Leicester I know well enough to do it for me. It's quite a responsibility for someone to undertake.'

Ms Skilton says she does not want to make money out of the arrangement. 'If it covers the mortgage and the poll tax, I'll be happy. The council promises to redecorate and to do any weekly maintenance, and having the house will help them as well.'

David Fussel, a chartered surveyor with Strollmoor, an investment company that leases properties to Hammersmith council in London, says the scheme has many advantages but is not without flaws.

'The council pays a reasonable rent, though not as good as it used to be; the cheques don't bounce, and you're sure to get your money.

'We get one cheque a quarter for all our properties, and we don't get bad debts. We're responsible for outstanding repairs, but not inside the house, and it keeps our management responsibilities down to a minimum.'

But he added: 'Some houses don't come back in reasonable condition. We can balance them out with the ones that do, but an individual owner couldn't'

Councils promise that they will make good any damage caused, and they use check-lists to assess the condition of the property at the beginning and the end of the lease, but this can still give rise to disagreements. There can also be difficulties if the council's tenant is unwilling to vacate the property at the end of the lease.

The London borough of Richmond, which has been involved in private sector leasing agreements for the past four years, says it has never experienced this problem, and would take full responsibility if it did arise - even though eviction might take some time if a court order were required.

Frances Aldridge, a spokeswoman for Richmond, explained that the council would lease properties only if they were in good condition and met the borough's housing needs: 'We wouldn't want a five-bedroom house with swimming pool. We want two-bedroom houses in particular.

'They must be in a safe condition. We give the property a full structural and internal inspection, checking that it is not damp, is of sound structure, has good electrics, is not too draughty, has a good quality of roofing, hot and cold water, and is well-decorated. If it is not up to scratch we insist the owner brings it up to standard.'

Councils will usually lease homes for a minimum of one year and a maximum of three years. Some sign only two-year leases, with the owner having the option of a third year. The council gives a written guarantee that the home will be returned in the same condition as when taken over.

The owner continues to be responsible for external and structural repair, with the council as manager taking responsibility for internal repair, and any damage caused by the tenant.

An advantage for the councils is that leases are usually cheaper than bed-and-breakfast accommodation - as well as being considerably more satisfactory for the tenants.

However, Hammersmith - which manages over 1,200 properties on lease - is running down its involvement in leasing schemes as a result of both the withdrawal of the government subsidy on leases and the increased availability of cheaper bed-and- breakfast deals. The councils describe what they pay as 'the market rent', though there is some haggling involved. A spokesman for the London borough of Sutton said: 'We pay the lowest rent we can negotiate. We employ a surveyor, who tells us the market value, and we try to reduce it.' A typical monthly rent in Sutton for a two-bedroom property would be pounds 500- pounds 600 if two families lived there, or pounds 400- pounds 450 if it was lived in by just one family.

Several London boroughs have agreed a basic pricing structure through the Association of London Authorities.

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