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West Midlands Social Lettings Agencies Regional Research Presentation 10 March 2017 West Midlands Social Lettings Agency Research Event 10 th March 2017 Vicki Popplewell West Midlands Housing Officer Group Welcome - Housekeeping - Purpose


  1. Social Lettings Agencies – Origins and Core Aims “ Social lettings agencies could be established to deal with all the private renting procurement required by statutory agencies in a given area. These agencies should charge a standard management fee, and move the housing benefit market away from a culture of ‘incentive inflation .” ( Rugg and Rhodes 2008) “ Social lettings agencies help people access the PRS who are homeless or on low-incomes ” (Shelter Scotland 2015)

  2. International Trends ( Especially where social housing is limited) “ a particular model of housing-led innovation in the area of homelessness developed in Flanders” “part of a movement to ensure adequate and affordable housing for vulnerable tenants through socialising the private rented sector .” BELGIUM De Decker, P. (2002) On the Genesis of Social Rental Agencies in Belgium, Urban Studies 39(2) pp.297 – 326. HUNGARY Hegedus, J., Horvath, V. and E. Somogyi (2014) The Potential of Social Rental Agencies within Social Housing Provision in Post-Socialist Countries: The Case of Hungary, European Journal of Homelessness 8(2) pp.41-67 IRELAND Laylor, T (2014) Enabling Access to the Private Rented Sector? The Role of Social Rental Agencies in Ireland European Journal of Homelessness 8.2 43-63. EUROPE FEANTSA (2012) Social Rental Agencies: An Innovative Housing-Led Response to Homelessness. Good Practice Briefing (Brussels: FEANTSA).

  3. Wider and Divergent Purpose? SOCIAL “ this cannot be achieved through merely providing • them with a roof over their head.” – advocates wide range of services such as child care, employability advice to “assist people to take control, be motivated and move forward”. (Crisis, 2015) OR COMMERCIAL “ the terminology has come to be applied • specifically to those schemes that operate on a commercial basis and so generate income through their activities.” (Shelter Scotland 2015) ‘ they operate along the lines of a high street lettings agency ’ (CSJ 2015) “ a broad umbrella term. It encompasses a large range of • different approaches and types of organisations, with different motivations, structures, operations, funding and governance arrangements.” (Shelter Scotland 2015)

  4. Ambitious & Ambiguous Aims Tenant empowerment and choice • Lower than market rents for economically • disadvantaged • Improving local PRS market standards • More affordable to authorities than alternatives such and B&B and leasing • Business/ Commercial/social enterprise approach to generate income and cover costs To socialise the private rented sector • (FEANTSA 2012) Wider support to assist people to move • forward e.g. childcare and employability support • ‘ to minimise risk to landlords so they are willing to let to benefit claimants ’ (CSJ 2015) • More than housing? ‘ Typically SLAs will have support workers who regularly check in on the So how do we make sense vulnerable ’ (CSJ 2015) of these competing (cl)aims?

  5. But there are strategic challenges… Five Warwickshire LAs commissioned 2013 study which advised ‘ social letting model is unlikely to be the most appropriate model at this time, and particularly not a cross- authority model’ because of:  Set up costs (70-113k)  Need for ongoing subsidy (to cover costs above admin fee and management fee)  Viability with pressure on LHA (growing rent arrears & some SLAs closing or winding down)  Alternatives to a new free-standing agency (partnerships websites & bond schemes)

  6. …and operational ones  Cambridge City Council- Town Hall Lettings (2015)  Major problem cited was non- payment of rent … not providing the levels of support needed to sustain tenancies:  “ Clients initially assessed as having low-needs have subsequently revealed challenging behaviour” and “an early failure to understand the myriad practical demands arising from the need to prepare a tenancy from scratch, placing heavy demands on the time of the managing officer ” (Cambridge City Council, 2015, p. 13)

  7. But also positives…  Real Lettings Agency: Since 2013, Croydon Council has invested £45m in the Real Lettings Fund (RLF), a joint scheme with charity St Mungo's  Cutting annual B&B bill by over £1 million (Croydon previously spending nearly £22m on temporary accommodation over an 18-month period)  Good-quality, long-term housing for 151 households instead of short-term , emergency accommodation.

  8. And a demand for more… “We are calling for a capital fund of at least £40 million , and creative use of new funding that has become available to the Department for Communities, to greatly expand the roll of social lettings agencies across this country. These provide the incentive needed for more landlords to rent long-term to Housing Benefit claimants, and provide support for vulnerable tenants to sustain their tenancies. We also propose a series of reforms to the framework in which the private rented sector operates, so that families can have security beyond six or 12 months in their tenancy.” (CSJ, 2016)

  9. Typology Elements • Who? – are the lead organisations – does sector and ethos make a difference? • Why? – motivation and rationale clearly mixed and variable – how does the mix affect the model? • How? – guides focus on processes and business models – Do these determine the outcome? • What? – range of services offered determines the scope and who the SLA is for

  10. The Whole Typology Why? Who? – Lead Agency - Niche Groups Models How? What? -Business model & - services menu for viability landlords & tenants

  11. Where are the Gaps in knowledge? • Most existing guides are concerned with process, start ups and viability • Less concerned with outcomes and experience of tenants and landlords • Very little exploration of trade-offs between competing aims (e.g. social v commercial) • Limited coverage of West Midlands (apart from LTB and Worcester CAB SmartLets in Shelter Scotland guide) ‘4 Ps’ Research Framework focuses on these gaps and being applied to Let to Birmingham case study

  12. The Four Ps People Properties Policy Process

  13. Sources Inside Housing Solutions and Crisis UK (2015) Social lettings agencies: How to plan, develop, launch and sustain an income generating SLA . Crisis De Decker, P. (2002) On the Genesis of Social Rental Agencies in Belgium, Urban Studies 39(2) pp.297 – 326. Anna Evans (2015) Social Models of Letting Agencies Scoping study . Shelter Scotland FEANTSA (2012) Social Rental Agencies: An Innovative Housing-Led Response to Homelessness. Good Practice Briefing (Brussels: FEANTSA). Hegedus, J., Horvath, V. and E. Somogyi (2014) The Potential of Social Rental Agencies within Social Housing Provision in Post-Socialist Countries: The Case of Hungary, European Journal of Homelessness 8(2) pp.41-67 Laylor, T (2014) Enabling Access to the Private Rented Sector? The Role of Social Rental Agencies in Ireland European Journal of Homelessness 8.2 43-63. Leng, G (2013) Feasibility study of a Warwickshire social letting agency. GLHS Ltd. Rugg, J. (2011) Local lettings agencies: a good practice guide. Providing access to the private rented sector while generating income, Crisis, Ethical Enterprise and Employment, (3xE) Network. Rugg, J and Rhodes D (2008) The Private Rented Sector: its contribution and potential . Centre for Housing Policy, University of York. Winterburn, M (2015) Home Improvements. A Social Justice Approach to Housing Policy. Centre for Social Justice

  14. Report 2 • Two waves of research Autumn 2015 and Autumn 2016 • Tenant interviews (3-2015, 15 - 2016) • Landlord interviews (2- 2015, 7 - 2016) • Data analysis in context of wider PRS and LHA market in Birmingham • Origins and Set up • Policy and Process review • Recommendations

  15. Let to Birmingham Study • Social Lettings Agencies and ‘the new social housing’ • Research fills gap on outcomes and experience of tenants and landlords • LtB established January 2014 • Had procured a stock of 400 homes by November 2016 • Two waves of research Autumn 2015 and Autumn 2016 – Tenant interviews (3-2015, 15 planned, 10 completed 2016) – Landlord interviews (2- 2015, 10 planned 2016) – Data analysis in context of wider PRS and LHA market in Birmingham – Policy and Process review

  16. Let to Birmingham – Findings P eople P roperties P rocess P olicy

  17. Let to Birmingham Case Study: Tenants Mapping Tenants in relation to use of SLAs Types: Motivation: Barriers: Enablers: FOUND Security/conditions/ Work disincentives Access Route & speed 1. Prevention costs (higher rent HALD Information 2. Housing options Independent home scheme) Confidence and Trust 3. Direct Approaches Convenient Location Council tenancy Bond scheme & no /Self Referrals for family/work ties advantages (rents, deposits 4. Council tenants Better community security, RTB) – Higher quality stock NOT FOUND ties Limited Supply (HALD scheme) 1. Statutory Stock size, type and Good spread of lettings Homeless location across Birmingham 2. Other statutory agencies placing in PRS 3. Moves from TA

  18. People • Prevention/Housing options rather than homeless discharge • Most unemployed – young mums, people with disabilities • Most popular features speed and ease of access and quality of management - ‘it all happened so fast’ • Property quality generally good but rents seen as expensive (HALD) and several tenants planned to move if they got a job The age profile of LTB lettings was much younger than the wider Housing Benefit • Not generally compared to council housing but in market. Only 6% of HB claimants in the some cases compared favourably (property type and PRS were under 25 compared to 34% of location) ‘ after x years there were only two or three LtB people I knew, here I talk to over 20 neighbours’ • Generally seen as providing a better service than securing PRS direct (condition on letting, avoid deposit and responsive repairs) • Lack of security not seen as a major limitation and confidence increased where had good direct relationship with landlord as well as LtB • But not always seen as ‘home’ – permission for the proportion of LtB lettings to people decorations and sense of impermanence . with self-reported disabilities appears to be higher than amongst the wider population

  19. People: LtB meets a range of housing needs • ‘ We was in a council high • ‘ It was a family matter, rise in Birmingham, we had yeh? I had to move out. She two autistic children of 9 kicked me out and the and 12 of opposite sexes police told me that I can’t sharing a room for the best go back there. ….so I was part of four years but the homeless on the streets, sharing age kept going up move from friend to friend, and we needed out. Bidding sleep in cars, that’s going on for council properties had for nearly a year . I didn’t been demoralising but we get nowhere until this had an adviser from Social August. Let to Birmingham Services (Home Start) who say the person who was talked to City Council and living here was going to explained the situation. leave, and it was ok’ (T11) (T10) Interviewees talked about their experience prior to the LtB tenancy of sleeping in cars, overcrowding & waiting for transfers, sofa surfing , poorly heated PRS and needing a place without stairs and having a baby.

  20. Speed of Access ‘It all Happened so fast ’ LtB’s three times a week drop in at Newtown can result in speedy offers. This approach appeared to take some clients by surprise. Some were clearly expecting more formal process and came armed with evidence of medical needs etc. The same surprise at speed of access came across in several interviews: ‘ we ended up on the waiting list and we rang LtB who said there was nothing they could do but then he said hang on if I send you the forms where do you want to move….the next thing we knew he said do you want to come and have a Two speed housing at the Newtown look…we loved it and signed the papers Homeless Hub there and then ‘(T3)

  21. Quality of Accommodation & Service LtB scored highly with most tenants on property quality & services: I would say it’s a nice property, just a few flaws like the front door that needed attention’ (T9) ‘ I was pregnant and come and viewed the place and had the pick of the flats which were just being built…its lovely there’s never been any problems.’ (T4) ‘ well honestly speaking the staff at LtB will listen to your problems and sort them out .’ (T12) Undoubtedly the HALD rate helped enabling LtB to source some newly built and recently converted properties in popular areas ‘ we lived in the three tower blocks before for the last 14 years and I ‘d only ever known two of my neighbours to speak to, since we’ve been here I talk to over 20 neighbours. I get on with everybody’. ( T10)

  22. Security/Feeling at Home? • ‘I f the landlord like wanted his property back the letting agent has said he’d give three months to get somewhere else. L tB would get you what you want …as long as this is here we will stay..this is it our last move…. we hope to be here for many years. It never entered our mind that we might lose it.’ ( T14) • ‘ you can’t decorate here, no it’s the rules. It makes it feel less like home…( T6) • ‘ Omega said weren’t allowed to decorate for 18 months, but we met the landlady and she said do it when you want, it’s your home’ . (T3) There have been some experiences of failed tenancies/abandonments involving young people with no prior experience of independent living.

  23. Cost • ‘It’s OK but its round about £140 a week but I’m hoping to get a job and would want to pay no more than £80 a week. Once I start working full time I’m going to move out of here and get somewhere proper where I want to live. I would apply to the council but I doubt that I’d get anywhere because I’ve got no kids…I’d be on the list three to five years before they’d give me a property’ (T8) ‘ • I couldn’t stay long term because the rent’s too high…..would hope to pay around £100 less for a private flat shared with boyfriend’ (T6) • ‘The rent is more than we can afford really, the housing benefit covers just under half, but they have been flexible and we have met the landlady’. (T3)

  24. Where Next? Transfer or back to the Council? • ‘ I have a double push chair, I’m on the top floor, I have to go up and down it’s a nightmare…I’ve tried to let them know and asked if I could move to a property on the ground floor that was empty and they said no, that really annoyed me. They said once they have housed you they can’t rehouse you, so now I have to wait until I can save for a deposit to get a private place or go back on the council list ’ (T5) • ‘ Of course would have liked a council property. If you have to pay your Interviews with staff at the Homeless Hub own rent it’s usually less than a private landlord ’ (T15). explain the low level of referrals to LtB in terms of a ‘culture or waiting’ for the ON BALANCE LtB is able to procure security, Right to Buy and low rents still housing that meets quality criteria and associated with council housing by many can be speedy to access. The main applicants downsides are affordability & security

  25. Let to Birmingham case Study: landlords Mapping Landlords in relation to use of/signing up to SLAs Types: Motivation: Barriers: Enablers: Individual long term (e.g. Let property for secure Confidence to let to low Competitive package inherited) income income households and (fee/services) Individual Buy to Let Maximise rent income benefit claimants HALD rate enables LtB to pay Accidental landlords (job Receive services Trust that support will at LHA or above move rent:let) (especially vetting be provided when it is Bond scheme Portfolio small tenants, support and needed Tenancy support Portfolio large housing benefits) Dealing with Housing Difficulties in finding tenants/ Switching from other Some have more social Benefit /Universal maintaining occupancy niches (e.g. students) orientation (attracted Credit without an agent Commercial Lettings by focus on housing Previous difficulties with Agents (also) need and remember managing themselves importance of social Lack of trust of commercial housing for their family) lettings agents

  26. Properties Lettings by ward, January 15 to June 16 400 Now in stock , over 600 acquisitions to date 2014 – 179 2015- 239 2016 - 196 Lettings by size , January 15 to June 16 Good spread 38 out of 40 wards had at least one letting . Almost half of the wards (42%) had 10 lettings or more.

  27. Landlords: Mix of Individual and portfolio landlords VIP Portfolio landlords delivering Over 100 Individual or whole blocks and streets – 3 larger small scale landlords acquisitions included in tenant survey 4 bed former council house let at LHA by migrant to Australia Garage offices Portfolio switch from turned into 7 student HMOs to flats with 3 family houses in Perry different Barr landlords all ma managed by LtB

  28. Mix of Portfolio & individual landlords interviewed Sample no Landlord Type No of Properties No let by LTB L1 Portfolio (VIP) 16 ? Landlord since 1990, all properties are in Birmingham. 13 properties were student HMOs. Has been shifting some to LHA market with LTB. L2 Portfolio (VIP) 28 6 Landlord since 1986, has mix of HMOs and business lets. Upgrading HMOs to self- contained some of these let through LTB. L3 Single property 1 1 Former council property bought as bought after retirement as investment investment for grandchildren. Previous tenants trashed property so let through LTB to reduce risk. L4 Single property 1 1 Handling mother’s property inherited after on behalf of 4 siblings. Grew death of mother up in property and wanted it used for social purpose while generating income. Considering buying some other investment properties. L5 Family business in 5 5 Handling lettings in behalf of retail premises mother. Had difficulties with with 5 flats above some tenants and decided to let through LTB who helped resolve existing issues. L6 Portfolio (VIP) 40 17 Has own letting agency – owns 12 properties and manages 28 for others. Operates in a number of niches. In 2014 decided to use LTB for the LHA niche. L7 Individual Buy to 3 3 Remortgaged own house to Let Investor buy as retirement investment. Now lives in high cost area but came from Birmingham so decided Variety of reasons for becoming landlords, family, to buy there. Used LTB because of local management. Attracted by inheritance, retirement planning, tax , business investment – social aims of LTB. some were also commercial lettings agents who engaged with LtB selectively for parts of their portfolio .

  29. Landlord Types & Motivations • I bought my first property in 1986 when I was still living with my parents and there was mortgage interest relief (MIRAS) so I thought I’d buy a property to let out – this is it ’ (L2) • ‘ I seen it advertised on a bus and out of interest thought that could be just the job for me, they market the property, vet the tenant and allocate and it seems that most of their tenants have some sort of support worker….. (L2)

  30. Social or Commercial? • ‘I’m in it for the money not the people but If they are good people and look after the property, you look after them’. (L1) • ‘we remembered what it was like for mum in the 70s; trying to get a council place’ (L4). • we wanted to give something back if you know what I mean, don’t get me wrong it’s for our retirement but in the meantime we know from our own work (in Local Government, Social Services) how difficult it is for people on benefit to get Former council house now let through housing…it’s as simple as that ’. LtB at LHA rate (L7)

  31. Why engage LtB? • ‘it was easier to let them do it’ (L1- transferring from student HMOs to LHA niche) • I’m very happy with the (LtB) service. It’s their responsibility now, they’ve done the vetting and if there is a problem they will notify Mum but apart from that I have nothing to do whereas before it was a nightmare because I’m here all the time running the shops as well ’ (L5 - owner of terrace of shops with flats above wanting to avoid hassle) • ‘I’m pleased with the rent, its more than I got from my last tenant (Before LtB) and its more secure’ ( L3, transferred from commercial lettings agent after property LtB built reputation and relationships by was trashed) helping landlords with existing tenancy problems

  32. Overcoming Barriers: Fear of People!! • • ‘my Mum’s been on that road ‘They can save landlords from since 1972 and I knocked on the hassle because they are good at neighbour’s door to say that I’m dealing with housing benefit and letting through Let to Birmingham tenants support’ (L1) and that there are no young children there so hope they will • ‘ the last tenant that we had was a not be disturbed. ……the tenants nightmare and I felt that we are low risk social people, no didn’t need that sort of stress…we ASBOs, no rent arrears, just had to go through all the needing somewhere to live. Cos procedures of issuing a section 21 you don’t want any disruption notice and they don’t take any with your neighbours; those notice when it’s you that they see people have bought their houses all the time and there’s direct and are enjoying retirement. So contact’ (L5) you’re looking for the right family to move into the house’ (L4) • ‘I prefer to deal with the property than with the tenancy issues ’ (L2)

  33. Enablers: Relationship Management! • ‘I can honestly say it feels like a personal relationship , not like talking to some estate agent, they level with you and we like that’ (L7) • ‘ I think you don’t have too much to worry about (with LtB) what you see is what you get.. you get the right person with the right support and that’s going to tell you the truth. .you’ve got no upfront fees to pay but you’re not going to get away with a lot because you have got a standard that you have to keep to or I don’t see Let to Birmingham taking on your property’ (L4) • ‘ LtB are more efficient than the council. They have less management tiers and lower overheads and good arrears control. They are very professional, friendly and knowledgeable, but I prefer to deal with the repairs myself’ (L2)

  34. One to Watch! – the repairs service • ‘ ‘They were amazingly costly for what it was… a minor job on one of the houses – taken from rent – god a couple of hundred quid just for screwing something in’………….…….Omega let you down on communications I don’t get who they are, you are just a number there, it’s a nightmare chasing up anyone at Omega lettings. I remember taking a bit of umbrage with their letters on a kitchen repair…tenants would not give access but all Omega did was sent a snotty letter‘ - they need to look at their standard letters. In the end this was resolved by LtB visiting the tenant and sorting the repairs. - It has to be localised it really does’. (L7) It is understood that LtB now has a multi- trade repairs officer at the Jewellery Quarter office.

  35. De-risking through rent guarantees? • ‘ the way it’s going because people are suffering. The big one is the guaranteed rent .. because I need the money to pay the mortgage each month’ (L7) • ‘ when I signed the leases I was under the understanding that I would be guaranteed the rent but now I realise that’s only if they get the money . It hasn’t really given me cause for concern as yet…..yes a guaranteed The No 1 risk for landlords is change in rent would give me a bit more welfare benefits certainty but I would be reluctant at LtB is proposing a Guaranteed rent to the same time to take less than the address this risk Local Housing Allowance because what I give is equal or superior to any Reactions to this vary depending on other landlord- I can’t not do it right‘ the extent to which landlords need (L2) rent to pay mortgages or have a cushion from historic purchase and low or no mortgage

  36. Process • Contract to run SLA won by a private registered provider able to access Let to Birmingham: Proportion of HALD scheme (funding rents well lettings by rent regime, January 2015 above LHA) to June 2016 • No decision on discharge of duty led to wider prevention role for first three years • Very speedy application, viewing and offer process once eligibility for LtB established • Communications with Council through project board but weaker day to day and hit by staff cuts affected flow of nominations • LtB lettings officer now goes to Homeless hub three times a week to encourage council nominations • IT systems still being developed in third year of scheme

  37. Policy • Stimulated by Discharge but not used for it so far! • Ambitious initial target later moderated • Self-contained scheme but now part of a wider letting and management arm of Mears • Strict standards for all acquisitions, slightly higher standard for HALD properties • Rents negotiated on case by case basis – HALD and LHA used flexibly to meet landlord expectations • Little coordination with other public sector PRS users (in city council and elsewhere) • Harder to motivate landlords after recent welfare changes and tax relief reductions • Plan to move to (lower) but guaranteed rent • Difficulties in securing nominations

  38. Learning points • Promotion and support by council needs to be ongoing – a full time nominations officer is essential • Investment in IT and monitoring is needed to keep focused on aims and maximise efficiency of processes • Bonds need to be larger and longer. Landlords need to be indemnified against rent losses and tenants protected at two year point when bonds currently expire • Rent Relief scheme could address issues for tenants moving into work • A hardship fund is needed to avoid ‘revolving door’ evictions when rent unpaid and tenants not to blame. • failed tenancies/abandonments need to be addressed through pre-tenancy and sustainment work

  39. Recommendations To LtB Affordability • more lettings at or close to LHA rates to enable more people in work • internal cross-subsidy to charge lower rents for people moving into work • hardship fund to avoid ‘revolving door’ evictions. • Pathways into employment, training and education Security • longer term rental agreements to match the terms of guaranteed leasing arrangements • greater clarity on transfer policy (especially within blocks) • move-on options for young mums from kids only blocks • Rules on decorations could be applied more flexibility with agreement of landlords to help tenants to feel that this is their home. • Pre-tenancy training and sustainment programmes to avoid excluding more 'risky' tenants and reduce problems of failed tenancies/abandonments Recruiting and Retaining Landlords • The ‘people focus’ that landlords value should be emphasised in LtB’s marketing and service development. Scope for a Support Worker or external contracts • Concerns about repairs system and communication should be addressed • Guaranteed rents :a range of offers to suit different landlord types could also help LtB to manage its own risks. Potential for Expansion in the Region • LtB might explore a range of options to support SLA expansion in the region in collaboration with Combined Authority devolution arrangements.

  40. Recommendations To BCC- Homeless Hub • Promotion and support – a full time nominations officer • More timely referrals from the housing options team • Nominations process with monitoring of status of applicants and the extent to which homelessness is being responded to and prevented. • Regular briefing for hub advisers on LtB tenants’ positive experiences to identify interested referrals. Case studies from this research could assist in this process. • Greater use of video promotions at the Homeless Hub to promote LtB with tenants in the reception areas.

  41. Recommendations To BCC Commissioning • Review options for end of contract in 2018 – will LTB governance structure continue? If not how much access can BCC expect to have to future lettings generated by LtB/Mears? • What relationship does the Council want to retain or develop with Mears and other potential contractors? • Should there be further SLAs or new initiatives such as a Real Lettings Fund to purchase properties to let as temporary accommodation or move- on accommodation (adding to the 7- 800 properties within BCC’s ‘peak temporary accommodation’ portfolio? • Explore the scope to manage the 2019 transfer of responsibility for exempt accommodation payments to BCC from DWP and consider how this opportunity can be used to generate service and access improvements for users of specified supported exempt providers • Managing the Market – use market intelligence gained from LtB and from landlord interviews in this project . • Market shaping work should be undertaken in close collaboration with other authorities through Combined Authority devolution arrangements.

  42. Let to Birmingham – Recommendations for Commissioning Mike Walsh Service Lead – Intelligence, Strategy & Prioritisation Commissioning Centre People Directorate 10 March 2017

  43. Background • Part of the team that commissioned the Social Lettings Agency • Partnership Board maintained whilst BCC funding continued (18 months) • 5 year partnership nearing an end

  44. Reflections • Original aspirations proved overly ambitious – Numbers – LHA rate • Homeless Discharge Policy not adopted • But: – Has provided another housing option and tool to prevent homelessness – Quality has been good – A success on those terms; although more limited than anticipated

  45. Response to Recommendations • Continued appetite to engage with contractors who can provide access to the private rented sector • PRS accommodation recognised as a vital part of housing supply and essential to helping to meet need • New financial models are needed – policy environment has changed and models need to adapt • Supported Housing Strategy to be developed to determine approach to exempt accommodation payments • WMCA v local footprint of SLA

  46. Report 1 • Project overview and purpose • 3 regional peer learning events • 5 case studies • Wider regional context – LHA rates and rents • Future Policy Scenarios • Recommendations

  47. Regional Stakeholder Events: Peer Learning Workshops

  48. Peer Learning Events  Part of the WMSLA research project programme  3 events held in Telford, Stafford and Birmingham in Nov 16 and Jan 17  Shared research findings  Facilitated peer learning between participants  Shared knowledge and experience of the strategic and operational issues  4 Ps framework  SLAs - Aims and business models  Future possibilities

  49. The Marches- Telford & Wrekin Council with Telford Home Finder  Telford Home Finder  Telford & Wrekin Council  Herefordshire Housing Limited  Marches LEP  Shropshire Council  Sandwell Council

  50. The Rural Districts – Stafford District Council  Sandwell Council  Stafford Borough Council  Stafford and Rural Homes  South Staffordshire Council  Staffordshire Moorlands District Council and High Peak Borough Council  Wychavon District Council  Rugby Council  Wyre Forest District Council  East Staffordshire Borough Council

  51. The Met Authorities - Birmingham City Council with Let to Birmingham  LtB and Mears Group  Crisis  Birmingham City Council Officers  Birmingham City Councillors - Acocks Green, Sparkbrook & Balsall Heath  Dudley Metropolitan Borough Council  Sandwell Metropolitan Borough Council  Solihull Council  City of Wolverhampton Council  Wolverhampton Homes  Coventry City Council

  52. Need/Supply and Risk 1. Need for schemes to improve access of low income groups to decent and affordable homes in the PRS. The Homelessness Reduction Bill is in a series of policies that challenge local authorities to find new sources of housing supply. 2. Budget cuts and pressures on existing staff resources in local authorities are seen as significant challenges to taking new initiatives such as setting up SLAs. 3. Revenue costs for management and service provision are also seen as challenging within the current market and welfare reform environment. 4. In current context SLAs are therefore viewed as a risky undertaking for individual local authorities to contemplate.

  53. “ We need to do something to be able to increase supply – we are looking at it from the point of view of Private Sector Discharge but we can’t access the market…we have runaway rents in the private sector….The booming market is making landlords put up their rents. Landlords are selling off their properties and we can’t get them (the properties) back in, and that’s another motivation for setting up a Social Lettings Agency…but we are finding it difficult to make it stack up financially .” (Rugby Council participant)

  54. Funding and Collaboration 5. There is appetite to share risk and costs by collaborating regionally , whether with other LAs, HAs or setting up a consortium or by buying in to the services of existing agencies. 6. There is a need for upfront funding/ grant/ subsidy to make SLAs feasible but there is a prospect of sustainability through management fee income once a critical mass is reached. 7. The gap between LHA and market rents is a critical barrier to a viable business model and requires further exploration across the region.

  55. Tenant Needs and Incentivising Landlords 8. SLAs need to balance landlord and tenant needs . 9. A range of guarantees and incentives can be used to attract landlords, including tenant selection/ vetting and tenant support. 10. Bond schemes do attract landlords, but are a high liability risk for SLAs/ councils at the end of the bond period. 11. Accreditation can be used as an incentive for landlords and landlords’ membership of Landlord Forums is seen as a positive 12. Need for a more commercial focus to attract less socially minded landlords, and to professionally market the added value and “differentiated service offer” of SLAs compared to commercial lettings agents.

  56. “ We do sit in the middle , we really do… because we have the pressures from landlords like any lettings agent…if we get a call at 8 in the morning, they expect a call back by 1pm …they are business people… they want to ensure their investment runs smoothly. And then with the tenants, very often they find we have very good relationship with them, we are responsive and proactive, going out, trying find the issue before it starts…so the management service has to be spot on!” (Let to Birmingham participant)

  57. “ Yes, you do have those landlords out there who have got that social conscience…but they’re probably 10%, the other 90% are not interested in working with us on the basis that it doesn’t pay to do so…so if we can offer them something that’s more than the sum of its parts …offering them that value for money …rather than relying on their goodwill.” (Telford Home Finder participant)

  58. Finally…  There is more going on in the region than we thought…  Three SLAs emerged at events and were included as case studies in Chapter 3 of our report.  Other accommodation access schemes managed by agencies such as Shropshire Housing Alliance are likely to exist ‘below the radar’ across the region and could form a good basis from which SLA type services could be developed.

  59. Regional Case Studies • 5 cases – 3 LA initiated - one as public private partnership (PPP) – 2 voluntary sector (TSO) led • Clear differences between LAs and TSOs • All in operation by end of 2014 • 1400 lettings and 800 in management by end 2016 • LAs schemes cover single authority, TSOs operate in 3 and 5 LA areas • LA schemes build from housing options, TSOs from ‘non - priority’ homeless clients • Younger people and people with disabilities tend to be over-represented. Most tenants are out of work.

  60. Organisational Purposes Social Purposes Commercial Purposes • • Homelessness Prevention most Social enterprise model important important in both TSOs • Not much used to discharge homeless – Aim to generate fee income to duty cover running costs • Some transfers from social housing – Exempt accommodation rate • Expanding types of supply to meet enables cross-subsidy of self- wider range of needs (e.g. shared contained homes housing, bungalows and options for – Use of surpluses to purchase higher income groups with poor credit properties to sustain organisation record) • Commercial driver in one LA and • Improving PRS conditions e.g. through PPP link with accreditation schemes and – Diversify and provide lettings inspection standards for SLA entry service for market rent • Potential of rent relief to enable people – Spread overheads by managing in work to stay and save for deposit rented portfolio for parent • One TSO expressed purpose as ‘to company return to the principles of the housing – Help landlords to manage risk by association movement’ offering guaranteed rent

  61. Key Enablers Identified • Start up Funding (DCLG & Crisis) • Business Models: – HALD (79% LtB rentals) – Exempt Accommodation (80% Spring rentals and 30% Smartlets) • Networks and Reputation, Personal Trust • Cross-subsidy possibilities ‘They can save landlords from hassle • Understand and respond to because they are good at dealing landlord motivations with housing benefit and tenant – Why would they pay management support’ & lettings fees? LTtB Landlord – Perceived strengths on people management & support ‘I can honestly say that it feels like a – Mitigating risks on rent income personal relationship, not like and damage talking to some estate agent, they – Some landlords have a social level with you and we like that ‘ motivation! LtB Landlord

  62. Key Barriers & wider regional context Principal Barrier Other barriers • Key barrier across region Another barrier is landlord unfavourable trend in LHA rates willingness to pay letting & and lower quartile market rents management fees out of rent • • Data shows variation across Landlord motivations to region but gap in most districts engage with LHA market and for most sizes of LAs accommodation • Competition with other • But areas with smallest gaps statutory users of PRS (incl. LHA/rents may also have London Boroughs) highest % of tenants with • Staffing capacity & marketing shortfall (60% Stoke claimants spend (an issue for both LAs in shared housing have and TSOs) shortfall despite smallest gap • Maintaining flow of referrals lower quartile rents with LHA) to let accommodation speedily

  63. Supported Exempt Accommodation for Single Homeless and Vulnerably Housed People Thea Raisbeck Crisis Skylight Birmingham

  64. What is Supported Exempt Accommodation (SEA)? Upper-tier County Council, housing association, registered charity or voluntary organisation  'where the body providing the accommodation, or a person acting on its behalf, also provides the  claimant with care, support or supervision' Bristol City Council v AW [2009] 'must not be a trifling amount' and must be made use of by the claimant  Rent reflects higher costs of providing this accommodation; LRR and LHA rates do not apply  Housing Benefit and Universal Credit (Supported Housing) (Amendment) Regulations 2014 – 'SEA' sits  outside of UC and exempt from bedroom tax and benefit caps High prevalence in Birmingham – HMOs under 'Registered Providers'  Vulnerable, often complex single homeless people through various referral routes – largely a 'hidden  population'

  65. What are the issues? Transience No licensing Lack of SAR = £57.34 focused SEA up to £250 outcomes HMOs Barriers to move on Lack of enforcement powers 'Registered Variable standards and Providers' variable 'support' levels Adapted from IPPR North Jan 2016

  66. What are the options? Identifying providers (not just 'how many' but 'who?')  Sharing information, good practice and intelligence (third sector, referring agencies, local authorities and  tenants) Addressing standards (property standards and standards of knowledge)  Market stewardship / regulation: exclusion of poor providers (live 'greenlists')  Tracking progress; navigating access and facilitating move on ('warm handovers', structured pathways)  Meeting need and increasing access to specialist support, education and training where relevant  Laying groundwork for changes to the funding of supported housing from 2019  A whole section of the homeless/vulnerably housed population that we know little about and that are not being given an adequate chance to end their homelessness. This type of provision is needed in Birmingham and can have value...but how do we make what we've got work better for our citizens?

  67. Where next?

  68. Social Lettings Research Presentation By: Dominic Bradley 10 th March 2016 Date: Registered office: Spring Housing Association, 16 Commercial Street, Birmingham, B1 1RS E: Info@springhousing.org.uk Web: www.springhousing.org.uk

  69. About Spring  Set up as a housing charity to work with people who are homeless or at risk of homelessness. We have 434 units of accommodation, from HMO’s to 5  bedded homes.  The accommodation is a mix of new build and refurbished stock.  Based in West Midlands (started in Birmingham).  89% of our accommodation is sourced from the private sector.

  70. West Midlands Landscape.  Population of 4m with 1.7m homes.  Average annual earnings of £23,936  Average House Price £187,000  Income required for an 80% mortgage is £42,800.  9.3%unemployment in metropolitan areas.  Huge variation in private rented market- rents and quality.  Over 260,000 housing association rented homes.  Some councils have a house building programme.

  71. The Birmingham Position  150,000 additional people and 89,000 additional households by 2031.  New Homes completions in Birmingham have fallen from 4,000 in 2005-6 to 1,809 in 2014-15.  Insufficient supply from Registered Providers and the PRS sector.  Housing Waiting lists at 21,000 with over 1,500 households in temporary accommodation.  Young City should be an advantage but welfare reforms very challenging for under 35’s.

  72. Spring offer to Tenants  Quality accommodation, the majority of which comes fully furnished.  We provide tenancy sustainment support which includes social, health, economic wellbeing  Mobile IT training suite  Support with Move on into either our accommodation or other providers.  Rent relief fund for people who gain employment/ who are employed.  No deposit  We will consider peoples personal circumstances including rent arrears.

  73. Engagement with the private sector  Our sector can often demonise the private sector.  We engaged with perspective landlords for 18 months before we started trading.  We talked business to business. Gained a clear understanding of their financial requirements. Returns are their primary focus, not our charitable aims.  Worked on individual business plans with landlords.  Landlords understood our requirements and specifications for HMO’s

  74. Landlord incentives  The receive a guaranteed income every month.  We manage all voids and income collection.  Maintenance is managed by us including all building safety checks and annual servicing.  After lease period is over the property is handed back in its original condition. Thus they can be confidently invest in the refurbishments knowing this.  The financial modelling demonstrates that is just as profitable to rent to us using this model bringing investment into the social sector.

  75. Examples  Adam and Eve

  76.  Long Term Options

  77. Conclusion Don’t compromise on quality.   Be flexible in terms of leasing arrangements.  Show perspective landlords around your current properties it builds confidence in you and establishes your standards.  Important that landlords see a return on their investment.  Have a post 2019 plan!

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