Early last year, I was working for the homelessness department of a London council when a woman approached me for assistance. The excited chatter of her two young children was at odds with the confusion and worry etched across her face. She told me how her landlord had issued her an eviction notice but, bewilderingly, he didn’t actually want to evict her. Instead he’d told her to, “go to the council, get them to pay me the incentive and you can stay”.

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Landlord incentives are essentially a bribe councils pay private landlords to persuade them to house homeless families or individuals. They are used to either keep tenants at risk of being homeless in their current property, or help ease the process of finding a new place to live. This practice is widely known of within the housing sector, yet is almost unheard of elsewhere. So I sent freedom of information requests to every local council in London to find out how prevalent the practice was. The results, as reported in the Guardian, are staggering. Between them, London councils spent more than £14m of public money on landlord incentives in 2018, paying incentives on more than 5,700 separate occasions. I would regularly hear of stories of one council offering a landlord a £2,000 incentive, only for them to solicit a better offer from another borough, playing the two authorities off against each other until they pocketed a £4,000 incentive to rent out a damp, mouldy studio flat in Harrow.

The most obvious solution to homelessness would be to build more social housing. But decades of government lethargy on house building – coupled with council homes continuing to be sold off under Right to Buy – means demand far exceeds supply. This is why we see councils paying private landlords millions in incentives to house homeless people or people at risk of homelessness, as they are forced to ration access to social housing.

When I worked for a local council, staff were explicitly told to inform anyone seeking assistance that their chances of getting social housing were basically zero. Private sector “negotiators” attended every housing assessment, informing households about the incentive scheme and how they would spend years in dreadful temporary accommodation if they tried to hold out for a council house rather than accepting an offer of private rented accommodation.

Yet evictions from private tenancies are the biggest cause of homelessness in the UK. Housing law allows landlords to issue a two-month eviction notice just four months into a 12-month tenancy, meaning a family could be legally evicted just six months after a council stumped up thousands of pounds to get them into the property. Furthermore, a 2018 study by the Centre for Housing Policy found that 38% of private renters are on low incomes. More than three quarters of this group are being reduced to poverty after paying their rent, leaving households stuck in a cycle of insecurity and homelessness. At the same time, the housing benefit paid to private landlords reached a cool £9.3bn in 2016, nearly double the £4.8bn the government allocated for house building in London between 2016 and 2021. At a time when councils are so stretched after a decade of austerity, stuffing this amount of public money into private pockets is nothing short of criminal.

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The long-term solution to this mess is creating more social homes. But even with the best will in the world, this will take years. In the short term the government must make the private rented sector a more hospitable place for people forced to live in it, by scrapping no-fault evictions and introducing rent controls. At the moment, councils are simply pushing people into a revolving door with no exit. Within as little as four months they can find themselves turfed out, despite councils having spent thousands of pounds in incentives to get them housed. If nothing changes, cash-strapped councils will have to continue to throw increasing amounts of money at a housing sector that is simply churning people in and out of homelessness.

• Nye Jones is a writer and housing campaigner