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West Midlands Social Lettings Agencies Regional Research Presentation

10 March 2017

West Midlands Social Lettings Agency Research Event

10th March 2017

Vicki Popplewell West Midlands Housing Officer Group

Welcome

• Housekeeping
• Purpose of event
• Agenda

WM Housing Officer Group

• West Midlands local authorities with a strategic housing

function

• Stock/non stock owning districts, unitary and Mets
• Operated since 2011
• Cover cross boundary strategic housing issues
• Share information and best practice
• Task and Finish Groups – focus on specific areas – i.e. Supported

Housing Consultation, Social Lettings Agencies , Devolution Deal

• Respond to co-ordinated regional housing matters
• Oversee a forward looking housing research programme

focussing on strategic housing issues

Who are we?

WM Housing Officer Group

• Social / Private Housing
• Housing Allocations
• Local Lettings
• New Housing Development
• Housing Management
• Commissioning
• Affordability
• Housing Need
• Improving existing housing

stock

• Supporting people to live

independently longer

• Fuel poverty /energy efficiency
• Supported Housing
• Social Care and Housing
• Homeless Prevention
• Empty Homes
• Identifying future housing

needs………….

SLA Research

• Increasing PRS
• Decreasing Social Housing
• Need to accommodate homeless/low incomes
• How can we ensure good quality housing
• What are SLAs and what can we learn from

them?

Can SLAs provide a ‘new social housing ?’

SLA Research

• Increasing PRS
• Decreasing Social Housing
• Need to accommodate homeless/low incomes
• How can we ensure good quality housing
• What are SLAs and what can we learn from

them?

Can SLAs provide a ‘new social housing ?’

SLA Research

• Key messages emerging from stakeholders
• Research finalised late March
• Outcomes will be shared with stakeholders
• Outcomes will inform WMHOG’s agenda
• Promote learning exchange across WM/wider
• Consider how we can promote regional initiatives
• Inform Government thinking – reference to SLAs in

Housing White Paper

Can SLAs provide a ‘new social housing ?’

Thank You

Social Lettings Agencies Regional Research Presentation

David Mullins, Professor of Housing Policy, Halima Sacranie, Associate Research Fellow Housing and Communities Research Group 10 March 2017

Research Outputs

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

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

Report 3

• Policy Background
• Definitions
• Typology
• Literature Review
• Gaps in Knowledge
• Research Framework
• West Midlands Issues

Research Outcomes

• 57 people directly engaged

in 3 peer learning events

• 60+ here today
• Networking between 5

active SLAs in region, LAs, and voluntary sector

• New knowledge on landlord

motivations and tenant experience

• Evidence to shape future

policy in region

• Resource for National

influence

Wider Impact

• 1400 lettings across region in

last few years

• 800 tenants in fully managed

stock

• Speedy Access
• Good Quality property and

service

• Some tenant support
• But sometimes expensive

/benefit trap

• Much less secure than social

housing

• Major impact on

homelessness prevention

• Innovation transfer

It’s better than places I rented before. I like the way its carpeted, well kept and it’s not cold. Its centrally heated but that’s a bit expensive’. LtB tenant , Aston New build LtB apartments in Tyseley

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
• Understand and respond to

landlord motivations

– Why would they pay management & lettings fees? – Perceived strengths on people management & support – Mitigating risks on rent income and damage – Some landlords have a social motivation!

‘They can save landlords from hassle because they are good at dealing with housing benefit and tenant support’ LTB Landlord ‘I can honestly say that it feels like a personal relationship, not like talking to some estate agent, they level with you and we like that ‘ LTB Landlord

Innovation Possibilities

Rent Relief Fund, Spring Housing

• Innovative solution to ‘benefit

trap’ in exempt accommodation sector and the ‘gig’ economy

• responds to tenants moving into

and out of low paid and insecure jobs

• £140,000 fund from better voids

and bad debts performance

• Tenants in work can have up to

50% rent reduction for 2-4 months

• Has enabled 45 existing tenants to

move into work and allowed 76 new lettings to people in work ‘The impact of moving into Spring accommodation on this young person has been enormous. 12 months later he is still in his accommodation; his mental and physical health have vastly improved, his social networks have increased and he is still in

• employment. Without Spring's Rent

Relief Scheme; this young person would have been in a very different - and possibly quite desperate – position’.

Crisis Project Worker

Innovation Possibilities

NuPlace, Telford & Wrekin

• Council’s market rent new

build arm sits in Commercial Division alongside Telford HomeFinder (SLA)

• Provides lettings agency work

stream for Telford HomeFinder

• Helps to diversify market

niches

• Potential for cross-subsidy
• Wider property choice to build

profile

Telford HomeFinder advert outside council offices

Scoping Future Policy Drivers

Opportunities

• 2017 Housing White Paper to ‘fix our

broken housing market’

• 2016 Centre for Social Justice report

‘Home Improvements’

– ‘We are calling for an SLA capital fund of at least £40million’

• 2016 Homelessness Reduction Bill
• Green Paper 2017 on transfer of exempt

accommodation and supported housing funding to local authorities 2019

• 2017 Combined Authority devolution

arrangements

• Continued reductions in social and

affordable rented housing

• Growing perceived risks but continued

expansion of LHA niche

• Student Accommodation Market

volatility (campus closures and more purpose built accommodation, more students living with parents) Threats

• Continued failure to uprate LHA
• Potential for HALD and exempt

accommodation rents to be reduced

• Benefit caps
• Universal credit ending most direct

payments to landlords

• Landlords affected by phasing out of

MIRAS, stamp duty increases, growth in regulatory burden and additional duties such as Right to Rent (immigration control)

• Supporting People further cuts

How can SLAs meet growing need for ‘next best’ to social housing, achieve viability, incentivise good landlords and provide services that landlords & tenants most value?

Regional Recommendations

Build on Success:

• Support existing SLAs
• Explore the potential to cover

more parts of the region

• Promote learning exchange

across the region

• Support policies to enable

more people in work to live in SLA accommodation

• Support project on future policy and practice

around the exempt accommodation sector

• Improve coordination with other statutory

users of PRS (Social Services, Probation, Refugee programmes) across the region to manage the market

Use the report to influence national policy:

– Strengthen 2017 White Paper proposal to ‘consider whether SLAs can be an effective tool for securing more housing for people’ by supporting the 2016 Centre for Social Justice £40 million fund for start ups – Review the impact of static LHAs well below bottom quartile rents to provide more stable funding base for SLA business models

Consider regional initiatives through Combined Authority devolution arrangements:

– Pan-authority options for those LAs attracted by SLAs but not wanting risk – more ambitious investment fund model like the Real Lettings Fund in Croydon to purchase and lease accommodation to authorities

PRS: The New Social Housing?

“There is no political will to revive the social housing

• sector. Local lettings

agencies offer a ‘next-best’ alternative.” (Rugg, 2011)

• But how will this meet core

social aims of security, affordability, need and quality?

• Is it feasible for PRS access

through SLAs to become the new social housing?

• From Social Rent to

Private Rent

• 1 million low income

households into PRS in 10 years

‘Fixing our broken housing market’:

“We also want to consider whether social lettings agencies can be an effective tool for securing more housing for households who would otherwise struggle – providing security for landlords and support for tenants to help strengthen and sustain tenancies.” (DCLG, White Paper, February 2017, p. 66)

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)

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

• f 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).

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)

Ambitious & Ambiguous Aims

So how do we make sense

• f these competing

(cl)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 vulnerable’ (CSJ 2015)

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)

…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)

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

• n temporary accommodation over an

18-month period)

 Good-quality, long-term housing for 151

households instead of short-term , emergency accommodation.

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)

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

The Whole Typology

Who? – Lead Agency Why?

• Niche Groups

How?

• Business model &

viability What?

• services menu for

landlords & tenants Models

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

The Four Ps

People Properties Process Policy

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

• f 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

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

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

Let to Birmingham – Findings

People Properties Process Policy

Let to Birmingham Case Study: Tenants

Mapping Tenants in relation to use of SLAs Types: FOUND

• 1. Prevention
• 2. Housing options
• 3. Direct Approaches

/Self Referrals

• 4. Council tenants

NOT FOUND 1. Statutory Homeless 2. Other statutory agencies placing in PRS 3. Moves from TA Motivation: Security/conditions/ costs Independent home Convenient Location for family/work ties Better community ties Barriers: Work disincentives (higher rent HALD scheme) Council tenancy advantages (rents, security, RTB) – Limited Supply Stock size, type and location Enablers: Access Route & speed Information Confidence and Trust Bond scheme & no deposits Higher quality stock (HALD scheme) Good spread of lettings across Birmingham

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

• Not generally compared to council housing but in

some cases compared favourably (property type and location) ‘after x years there were only two or three 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

decorations and sense of impermanence .

The age profile of LTB lettings was much younger than the wider Housing Benefit

• market. Only 6% of HB claimants in the

PRS were under 25 compared to 34% of LtB the proportion of LtB lettings to people with self-reported disabilities appears to be higher than amongst the wider population

People: LtB meets a range of housing needs

• ‘ It was a family matter,

yeh? I had to move out. She kicked me out and the police told me that I can’t go back there. ….so I was homeless on the streets, move from friend to friend, sleep in cars, that’s going on for nearly a year . I didn’t get nowhere until this

• August. Let to Birmingham

say the person who was living here was going to leave, and it was ok’ (T11)

• ‘We was in a council high

rise in Birmingham, we had two autistic children of 9 and 12 of opposite sexes sharing a room for the best part of four years but the sharing age kept going up and we needed out. Bidding for council properties had been demoralising but we had an adviser from Social Services (Home Start) who talked to City Council and explained the situation. (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.

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 look…we loved it and signed the papers there and then ‘(T3) Two speed housing at the Newtown Homeless Hub

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)

Security/Feeling at Home?

• ‘If the landlord like wanted his

property back the letting agent has said he’d give three months to get somewhere else. LtB 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.

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

• n 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)

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
• wn rent it’s usually less than a

private landlord’ (T15). ON BALANCE LtB is able to procure housing that meets quality criteria and can be speedy to access. The main downsides are affordability & security Interviews with staff at the Homeless Hub explain the low level of referrals to LtB in terms of a ‘culture or waiting’ for the security, Right to Buy and low rents still associated with council housing by many applicants

Let to Birmingham case Study: landlords

Mapping Landlords in relation to use of/signing up to SLAs Types: Individual long term (e.g. inherited) Individual Buy to Let Accidental landlords (job move rent:let) Portfolio small Portfolio large Switching from other niches (e.g. students) Commercial Lettings Agents (also) Motivation: Let property for secure income Maximise rent income Receive services (especially vetting tenants, support and housing benefits) Some have more social

• rientation (attracted

by focus on housing need and remember importance of social housing for their family) Barriers: Confidence to let to low income households and benefit claimants Trust that support will be provided when it is needed Dealing with Housing Benefit /Universal Credit Enablers: Competitive package (fee/services) HALD rate enables LtB to pay at LHA or above Bond scheme Tenancy support Difficulties in finding tenants/ maintaining occupancy without an agent Previous difficulties with managing themselves Lack of trust of commercial lettings agents

Properties

Lettings by ward, January 15 to June 16 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. 400 Now in stock , over 600 acquisitions to date 2014 – 179 2015- 239 2016 - 196

Landlords: Mix of Individual and portfolio landlords

VIP Portfolio landlords delivering whole blocks and streets – 3 larger acquisitions included in tenant survey

Portfolio switch from student HMOs to family houses in Perry Barr

Over 100 Individual or small scale landlords

4 bed former council house let at LHA by migrant to Australia Garage offices turned into 7 flats with 3 different landlords all ma managed by LtB

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

• f HMOs and business lets.

Upgrading HMOs to self- contained some of these let through LTB. L3 Single property bought as investment 1 1 Former council property bought after retirement as investment for

• grandchildren. Previous

tenants trashed property so let through LTB to reduce risk. L4 Single property inherited after death of mother 1 1 Handling mother’s property

• n behalf of 4 siblings. Grew

up in property and wanted it used for social purpose while generating income. Considering buying some

• ther investment properties.

L5 Family business in retail premises with 5 flats above 5 5 Handling lettings in behalf of

• mother. Had difficulties with

some tenants and decided to let through LTB who helped resolve existing issues. L6 Portfolio (VIP) 40 17 Has own letting agency –

• wns 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 Let Investor 3 3 Remortgaged own house to buy as retirement

• investment. Now lives in

high cost area but came from Birmingham so decided to buy there. Used LTB because of local

• management. Attracted by

social aims of LTB.

Variety of reasons for becoming landlords, family, inheritance, retirement planning, tax , business investment – some were also commercial lettings agents who engaged with LtB selectively for parts of their portfolio .

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

• f support worker….. (L2)

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 housing…it’s as simple as that ’. (L7)

Former council house now let through LtB at LHA rate

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 was trashed) LtB built reputation and relationships by helping landlords with existing tenancy problems

Overcoming Barriers: Fear of People!!

• ‘my Mum’s been on that road

since 1972 and I knocked on the neighbour’s door to say that I’m letting through Let to Birmingham and that there are no young children there so hope they will not be disturbed. ……the tenants are low risk social people, no ASBOs, no rent arrears, just needing somewhere to live. Cos you don’t want any disruption with your neighbours; those people have bought their houses and are enjoying retirement. So you’re looking for the right family to move into the house’ (L4)

• ‘They can save landlords from

hassle because they are good at dealing with housing benefit and tenants support’ (L1)

• ‘the last tenant that we had was a

nightmare and I felt that we didn’t need that sort of stress…we had to go through all the procedures of issuing a section 21 notice and they don’t take any notice when it’s you that they see all the time and there’s direct contact’ (L5)

• ‘I prefer to deal with the

property than with the tenancy issues’ (L2)

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

• r I don’t see Let to Birmingham taking
• n 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)

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.

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 rent would give me a bit more certainty but I would be reluctant at the same time to take less than the Local Housing Allowance because what I give is equal or superior to any

• ther landlord- I can’t not do it right‘

(L2) The No 1 risk for landlords is change in welfare benefits LtB is proposing a Guaranteed rent to address this risk Reactions to this vary depending on the extent to which landlords need rent to pay mortgages or have a cushion from historic purchase and low

• r no mortgage

Process

• Contract to run SLA won by a private

registered provider able to access HALD scheme (funding rents well above LHA)

• No decision on discharge of duty led

to wider prevention role for first three years

• Very speedy application, viewing and
• ffer 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

Let to Birmingham: Proportion of lettings by rent regime, January 2015 to June 2016

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

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
• n 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

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
• wn 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.

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.

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-

• n 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
• ther authorities through Combined Authority devolution arrangements.

Let to Birmingham – Recommendations for Commissioning

10 March 2017 Mike Walsh Service Lead – Intelligence, Strategy & Prioritisation Commissioning Centre People Directorate

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

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

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

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

Regional Stakeholder Events: Peer Learning Workshops

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

The Marches- Telford & Wrekin Council with Telford Home Finder

 Telford Home Finder  Telford & Wrekin Council  Herefordshire Housing Limited  Marches LEP  Shropshire Council  Sandwell Council

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

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

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.

“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)

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

• r 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.

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.

“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)

“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)

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.

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
• ver-represented. Most tenants are out of work.

Organisational Purposes

Social Purposes

• Homelessness Prevention most

important

• Not much used to discharge homeless

duty

• Some transfers from social housing
• Expanding types of supply to meet

wider range of needs (e.g. shared housing, bungalows and options for higher income groups with poor credit record)

• Improving PRS conditions e.g. through

link with accreditation schemes and inspection standards for SLA entry

• Potential of rent relief to enable people

in work to stay and save for deposit

• One TSO expressed purpose as ‘to

return to the principles of the housing association movement’

Commercial Purposes

• Social enterprise model

important in both TSOs

– Aim to generate fee income to cover running costs – Exempt accommodation rate enables cross-subsidy of self- contained homes – Use of surpluses to purchase properties to sustain organisation

• Commercial driver in one LA and

PPP

– Diversify and provide lettings service for market rent – Spread overheads by managing rented portfolio for parent company – Help landlords to manage risk by

• ffering guaranteed rent

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
• Understand and respond to

landlord motivations

– Why would they pay management & lettings fees? – Perceived strengths on people management & support – Mitigating risks on rent income and damage – Some landlords have a social motivation!

‘They can save landlords from hassle because they are good at dealing with housing benefit and tenant support’ LTtB Landlord ‘I can honestly say that it feels like a personal relationship, not like talking to some estate agent, they level with you and we like that ‘ LtB Landlord

Key Barriers & wider regional context

Principal Barrier

Key barrier across region unfavourable trend in LHA rates and lower quartile market rents

• Data shows variation across

region but gap in most districts for most sizes of accommodation

• But areas with smallest gaps

LHA/rents may also have highest % of tenants with shortfall (60% Stoke claimants in shared housing have shortfall despite smallest gap lower quartile rents with LHA)

Other barriers

• Another barrier is landlord

willingness to pay letting & management fees out of rent

• Landlord motivations to

engage with LHA market and LAs

• Competition with other

statutory users of PRS (incl. London Boroughs)

• Staffing capacity & marketing

spend (an issue for both LAs and TSOs)

• Maintaining flow of referrals

to let accommodation speedily

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

• 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
• utside 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'

What is Supported Exempt Accommodation (SEA)?

What are the issues?

HMOs No licensing 'Registered Providers' Lack of enforcement powers Transience SAR = £57.34 SEA up to £250 Lack of focused

• utcomes

Adapted from IPPR North Jan 2016

Variable standards and variable 'support' levels Barriers to move on

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?

Where next?

Social Lettings Research

Presentation By: Dominic Bradley Date: 10th March 2016

Registered office: Spring Housing Association, 16 Commercial Street, Birmingham, B1 1RS E: Info@springhousing.org.uk Web: www.springhousing.org.uk

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.

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.

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.

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

• ther providers.



Rent relief fund for people who gain employment/ who are employed.



No deposit



We will consider peoples personal circumstances including rent arrears.

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

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.

Examples



Adam and Eve



Long Term Options

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!

End of Presentation

Panel Discussion and Questions

• Dominic Bradley (Spring)
• Gaynor Darby (LtB)
• Maura Mulligan (BCC)
• David Mullins (UoB)
• Thea Raisbeck (Crisis)
• Michael Walsh (BCC)

What one thing would you like to see happen to enable SLAs and PRS access schemes to succeed in the West Midlands ?