Social Letting Agency
Many local authorities and other public bodies are looking into setting up their own not-for-profit letting agencies to house people in the private rented sector. Sometimes these initiatives are called private rented sector access schemes. Most private landlords and /or commercial letting agencies would normally turn these types of tenants away, so this is quite a challenge.
At LettingFocus, we have helped public bodies setup social letting agencies. Here are what we think are some of the key points to consider when setting up a social or community lettings agency.
Get Stakeholder Buy In
This means the buy-in of all senior management – councillors and executives. But it also means you have to set out clearly what it is you are planning to do to both tenant and landlord groups – and involve them in steering groups, if appropriate.
And you must explain to commercial letting agents what it is you are setting up, so they are not worried about what they might otherwise see as unfair competition.
Be Realistic About the Challenges
Most private landlords do not let to low income and “benefit tenants” for a whole host of reasons. You have to counter all these objections and make letting to these people worth their while. This is never easy, but it can be done.
Unless you understand landlords’ possible objections, you will never succeed. You have to put yourselves in the mind set of landlords.
The social letting agency does not have to be open at weekends and in the evenings, but don’t think you can respond to a private landlord enquiry “some time next week”. That just won’t wash – landlords have a choice about who they let to – and they have a choice about the letting agency they deal with too.
You simply have to respond within 24 hrs.
You must engage with private landlords in the right media, so they know what you have to offer. Think about raising your profile online more than worrying about landlord forums!
Most community letting agencies fail because landlords do not even know what is on offer, because they never get to hear about it, because the web landing page is not in existence or is not right, because they call the switchboard who mis-directs the call or because no one returns their call.
Most landlords in your area will look online – and will find you there, if you can be found at all. Don’t give up with landlord forums but most landlords in your areas do not go to go to your landlord forums.
Type of Landlord
Work hard to get the landlords you already have a relationship with (perhaps through bond schemes) to get them to put more of their properties in your social letting agency. It will be much easier to deal with these landlords than trying to explain the workings of the housing benefit system to new landlords who have no prior knowledge of how this works. But also avoid the temptation to have too many properties with just a few landlords. We say no more than 50% of the properties should be supplied by less than four landlords.
On Boarding and Removing Onerous Restrictions
Don’t require landlords to jump through unreasonable hurdles to qualify for your lettings service. If you require them to fill out huge documents for each property and you almost ask for the landlord’s inside leg measurement, or if you delay for a week before “inspecting” a property before giving it the go ahead, then you have failed to grasp the realities.
Sure, the properties must meet an acceptable standard, but they don’t have to be palaces either. If they were palaces, then the landlords who own them would not be putting them into your social letting agency scheme to get a rent at the 30th percentile of local reference rents, would they?
Agree and put in place the right measures and report to the right people. Agree what success will look like before you start out.
Learning from Others Experiences
We contend that a lot of other social letting agency schemes that purport to be successful have not been properly audited – and we think many are not actually as successful as claimed.
By all means see what has been tried elsewhere, but take time to learn from the experiences of those who really understand the commercial realities of the private rented sector and what landlords want. If you do this, you can set up schemes that really will have a chance of working.
We can help you with this – see contact details below.
Services to Businesses and the Public Sector
We advise a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers.
We help them develop and improve their services and products for private landlords.
David Lawrenson, founder of LettingFocus also writes for property portals, speaks at property events and is regularly quoted by the media.
Services for Private Landlords
We help landlords and property investors by showing them how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk.
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