Archive for the ‘Private Rented Sector Access Schemes’ Category

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Why Town Hall “Not for Profit” Letting Agencies Fail

Wednesday, November 28th, 2012

Local authority schemes to attract private landlords to let to people with few housing options often fail. Here at LettingFocus, we explain why.

I was invited to speak at the Chartered Institute of Housing (CIH) Homelessness conference in Nottingham last week.

This is a big national event to which around 140 local authority and housing association staff from all around the UK journey to each year in order to learn all about “new approaches to allocations, letting and homelessness”.

The conference contained a lot about the nitty gritty of how local authorities allocate social housing – a fiendishly complex area with a lot of law around it. The seemingly ubiquitous Jan Luba did a very thorough and interesting presentation on the latest new law affecting this.

While Jan spoke, the town hall staff, seated around me busily scribbled notes – which is not surprising as the last thing they want to happen is for their local authority to be sued for misallocation of housing. (Local authorities being sued is something that happens a lot and naturally many of the folk doing the suing get legal aid. So, it’s vital that the housing staff know the law and how it should be applied).

The Private Rented Sector

Most of what we heard at the conference was around the subject of allocating social housing and I’m afraid to say that the understanding of the private rented sector at the other sessions I attended still left something to be desired.

Of course, that was what I was on the bill to address – and I did my best.

At one break out session I was able to enlighten the leader and private rented sector expert (as well as all who attended the session) that

1)      Private landlords operating without an agent don’t have to physically hand over a deposit in the “insurance based” tenancy deposit scheme. Most just stick it in the bank and earn interest on it. (Another reason why local authority bond guarantees are a poor substitute).

2)      The terms and conditions of most buy to let mortgages restrict landlords from issuing tenancies longer than a 12 months fixed term duration. And that many lenders also do not allow private landlords to let to tenants who are on housing benefit.

Senior Executive Lack of Understanding of the PRS

Later, I was interviewed on a panel debate by host, Mark Easton (BBC Home News Editor) along with Steve Partridge of the Chartered Institute of Housing.

I held back from my usual mantra that a key problem for the town halls is that they lack Councillors, senior executive staff (and often external advisors) who possess a deep understanding of the private rented sector. (I have done some work helping local authorities and housing associations with all aspects of their work with the private rented sector and did not wish to overly self promote).

But as most of the delegates at such conferences seem to come from junior and middle management level, perhaps I should not have held back from making that observation. (I am always left wondering why so few of the senior people from local authorities and housing associations seem to be at these useful events).

Why Lots of Local Letting Agency Models Fail

One point I did not hold back from making was about the lack of evaluation of past local authority schemes to engage with private landlords, so called Private Rented Sector Access Schemes. These are variously called “Social Letting Agencies”, “Local Letting Agencies” and “Not for Profit Letting Agencies”. (These are where the town hall provides a range of services to try to get private landlords to let to folk with few other housing options ).

To us, at LettingFocus, it’s as obvious as a ham sandwich that many such expensive ventures have failed to deliver. You just have to look at the lack of properties these ventures have online to appreciate that private landlords are not engaging.

The Crisis representative put this failure down, in part, to a lack of local research by local authorities to understand what local private landlords want.

That has some truth but the same issues are faced by private landords in Waltham Forest as in Lewisham. And Reading will be much the same as Bristol.

I think a bigger reason why so few succeed is a lack of real in depth understanding of the private rented sector – and that goes right to the top of the local authorities. It is this that must change and hiring consultants with no background in the private rented sector will not help change it.

At LettingFocus, we possess that expertise and can design and implement schemes that will actually work.

ABOUT LETTINGFOCUS

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. We also write for property portals, speak at property events and we are 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.

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF THE MAIN SITE

For our main home page click here:  http://www.LettingFocus.com

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally mail landlords about good products from third parties. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

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Copyright of Blog: David Lawrenson 2012. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week.

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Posted in Housing Associations, Housing Benefit, Housing Strategy, Housing Strategy and the PRS, Local Housing Allowance, Local authority Tips for Housing Departments, Private Rented Sector Access Schemes, Procurement of Temporary Accommodation, Social Letting Agency | Comments Off

Council Schemes for Landlords and the Private Rented Sector are not making an Impact

Tuesday, August 21st, 2012
Councils’ failure to engage with private landlords means families could be needlessly placed in emergency temporary accommodation or out of their local borough.

Back in July, the Guardian newspaper published a piece of research I had just completed which showed how councils and housing associations are failing to engage private landlords with their various schemes.

I thought it worthwhile to reproduce the piece in full here – but the article with comments can be found online here: http://www.guardian.co.uk/housing-network/2012/jul/31/private-landlords-council-support-schemes?newsfeed=true

“In a desperately difficult housing market the housing solution that’s often put forward is the private rented sector (PRS).

Of course, the PRS has many drawbacks, but it’s not my intention here to look at the pros and cons of the sector as an answer to the crisis. I suspect its suitability (or not) will be a major talking point when the Montague report, which looks into the barriers to institutional investment in private rent, is published.

Instead, I want to look at private landlords’ willingness to work with councils to address the housing crisis.

Background

The background is that most parts of the UK, and London in particular, has a problem of a lack of housing supply.

The latest statistics from Shelter show that there are almost 37,000 households in temporary accommodation in London and 10 times as many on council waiting lists.

We know that council-run accreditation schemes have been marketed to landlords for a long time and at some cost, but the number of landlords signed up remains stubbornly low. There are a range of lease schemes in which a landlord can get a guaranteed rent from a local authority or housing association for a number of years. There are a variety of rent and deposit guarantee schemes, often designed to ease the risk that landlords perceive in letting to people in need of temporary accommodation.

Yet too often these products have failed to be promoted to landlords.

Lack of Impact Amongst Landlords

At LettingFocus, we asked 40 private landlords who are on our mailing list and who have properties in 12 London boroughs to find out whether they were aware of such schemes and what they thought of them.

Only two out of the 40 landlords had ever joined an accreditation scheme. Another two landlords were members of a landlords association. Only four out of the 40 were aware of local authority or housing association schemes such as rent or deposit guarantee schemes, even though all but two of the boroughs offered them.

Once we explained what these products involved, there was a strong interest from landlords, especially for lease schemes, with landlords particularly attracted to the chance to enjoy guaranteed rent, reduce voids and eliminate letting agency costs.

Two of the landlords had tried lease schemes already and one had tried a deposit guarantee scheme. They reported a reasonable experience, although both said they took too long to set up. They also said that local authority staff often did not seem to understand the time pressures that private landlords were under. Information was also sometimes considered incoherent or contradictory.

It is a great shame that so many private landlords seem willing and ready to offer accommodation to vulnerable households but local authorities and housing associations are unable to engage them. The result is that many vulnerable households end up in expensive emergency B&B accommodation or moved out of the borough altogether.”

Responses

The piece drew some strong support from one outspoken council worker who added these comments online in response….

“Councils have so much to bring to the table but they don’t know how to do it and PRS landlords don’t know what we’ve got or how to get it. …… It is a lack of understanding but it is driven by an entrenched public sector mindset that few can break out of……… If you say ‘This is what the council does’ and then expect landlords to work with you it won’t happen and yet this is what I see so many councils doing. They want to get on board, they see the need for it but they just dont know how to go about it because they can’t shake off the traditional and habitual role……… I think it is the speed that frightens local authorities. PRS people can come up with a good idea in the morning and just get on the phone and make it happen by afternoon but councils have to hold meeting after meeting for months, form project groups etc and it takes an age……..I know lots of people who do frontline people-facing work like myself who are full of energy and enthusiasm for PRS/Public partnerships but it gets squashed out of them by the weight of tradition and office politics.”

Over the next two months we will be doing further research into what local authorities offer private landlords and how they do it.

We hope to publish this in the autumn.

Your Experience

To assist this work, we would like to hear from private landlords about what your experience with local authorities and housing association has been like.

And we would also especially like to hear from other council and housing association workers too – you can, of course, do this in confidence if you prefer. Our email address is listed below.

ABOUT LETTINGFOCUS

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.

We also write for property portals, speak at property events (send an email to david@LettingFocus.com to find out about our next event) and we are 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.

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page – where, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF THE MAIN SITE

For our main home page click here:  http://www.LettingFocus.com

For general information on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER and get our latest Newsletter which goes to over 3,000 people (as at December 2011) just send an email to david@LettingFocus.com

We do not spam or sell our mailing list to advertisers, though we occasionally  mail landlords about good products from third parties. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE YOUR PRODUCTS to LANDLORDS click here: Landlords Resources

Please note we only allow selected advertisers to market their services.

PERUSE LAST TEN BLOGS BY GETTING THE RSS FEED: Click Here

NEXT SEMINAR EVENT FOR LANDLORDS: Landlord and Property Letting Seminar

Copyright of Blog: David Lawrenson 2012. Please link to us here or quote us.We actively pursue copyright infringements. The blog is updated once a week.

TWITTER PAGE For my thoughts on property, personal finance, plus a lot of other random things from sport, to 80s and 90s Indy Music, to tsunamis to musings on boardroom pay, plus my (usually) slightly centre left “take” on Uk and world politics please see our Twitter page.

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Posted in Accredited Landlords, Deposit Bonds, Discharge Homelessness Duty, Housing Associations, Housing Strategy and the PRS, Landlord Accreditation, Local authority Tips for Housing Departments, London Property Market, Marketing to the Private Rented Sector, Not for Profit Letting Agency, Private Leasing Schemes, Private Rented Sector Access Schemes, Procurement of Temporary Accommodation, Social Letting Agency | Comments Off

The Private Rented Sector Will Not Entertain Void Periods and Local Authorities and Housing Associations Need to Understand This

Monday, November 14th, 2011

Letting agents, local authorities and housing associations must start to understand that private landlords want to let fast and won’t entertain void periods. Many council and housing association schemes with private landlords fail to meet this need.

All smart landlords (and smart letting agents who know their business) know that minimisation of the “void period” is critical to success in making money as a private landlord.

For the uninitiated, the void period is the time that the property is not occupied by rent paying tenants, and any time a property is void costs a landlord money.

But too often I see properties that are being marketed by letting agents sitting empty for weeks on end – thus soaking up landlords’ cash. Local authorities and housing associations also fail in this.

Local Authorities and Housing Associations and Voids

Local authorities, trying to procure properties from private landlords usually don’t understand that speed of letting is of the essence, which is why their bill for other, more expensive temporary accommodation such as B&B type accommodation is soaring.

For example, a few years ago, in the Dover District council area in Kent where I let a property, a government backed private lease scheme was operating.

This promised a guaranteed rent if I sublet the property to them for three years with them then subletting the property on to people who might otherwise be homeless.

This sounded potentially attractive (and socially responsible too) until I learnt that it would be another two weeks before they could even book the appointment in to inspect my property!

And then I found out that their scheme (and the guaranteed rent) wouldn’t start until one of their tenants had said they wanted the property – and even then I would need to wait until all the cumbersome LHA approval processes had happened. Oh, and of course, the rent would be paid in arrears too.

Getting Real

Today I see lots of local authorities struggling to get private landlords to engage with them – either to give them their properties under private lease schemes or to let to LHA tenants under “Direct Lets” schemes.

Many local authorities in London offer fees over £1,000 as incentives to landlords if they will do a 12 month let, so desperate are they to get landlords engaged. (The fee makes up for the fact that their tenant clients won’t usually have any cash for a dilapidation deposit.)

But according to the landing page on some councils websites, the landlord would first be expected to sign an agreement with the tenant BEFORE the tenant has even had approval from the local authority that they qualify for Local Housing Allowance.

Even with the big fee, many landlords will be put off by the delay, because in London at least, few landlords are going to wait for weeks for a council to make appointments to inspect or for the rent, (guaranteed or otherwise), to start.

Councils (and some housing associations) operating like this are really operating in a weird sort of cloud cuckoo land; demonstrating how steeped they are in slow and cumbersome processes and how they are unable to understand the perspective of the private landlord where time delays and hassles equates directly to lost revenue.

Councils Need a Private Landlord Perspective

In my consultancy work with local authority’s private rented sector departments to date I have only met two people who are actually private landlords themselves.

In both cases, the schemes they were working to set up at their councils are at least beginning to take some account of the realities of the situation – which is that in a booming private rented sector, landlords will not entertain slow council processes that mean their properties sit empty.

How We Do It

In my own property letting business, I don’t let to LHA tenants – it’s too much hassle, currently.

I do all the advertising myself via Upad (See the link in the “Offers for Landlords”  section below) and I reference check the tenant applicant very carefully, making sure to choose someone who will be a good tenant.

I start advertising in the last 40 days before the current tenants leave (which is a clause written into my tenancy agreements) – with the intention being that, unless there is a redecoration needed, the new tenants can move in within a maximum of 3 days of the old ones moving out.

My properties are competitively priced so I know that the rent level I require will not hold enquirers back. After all, there is no point holding out for an extra £50 a month, if you then have a void period for a month on a £1,000 a month property, because that will take you 20 months to make up. And, if the property is furnished this void will also cost you in council tax payments too. And of course, you still need to pay the mortgage interest and insurance premiums (and the latter may be higher if the property in unoccupied over a long period.)

I have found that showing prospective tenants around when the old tenants are still there can often help let the property faster. This is especially true of part furnished or unfurnished properties. If the current tenants keep the place clean and tidy and have nice furnishings the property should let faster than when they have gone and the property is empty – because the prospective tenants will be able to “feel” the cosiness of a home and the lifestyle they could have.

Speaking Engagement

I’m booked to speak as a private rented sector expert at a forthcoming Chartered Institute of Housing event on the private rented sector in Cambridge in December.

If you are from a local authority of a housing association and you’d like to learn a little from me (and others) about how you might be able to do things differently, you should attend. I’m sure you will find the whole event interesting.

Let me know if you intend to come along. Click here for More: http://www.cih.org/events/display/vpathDCR/templatedata/cih/events/data/PRS

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and advice.

Services to Businesses and the Public Sector

We are consultants to 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.

We also write for property websites, speak at property events and we are regularly quoted by the media.

Services for Private Landlords

We also help landlords and property investors by showing how to make money in the private rented sector using ways which are fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the right of this page. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE

Click here:  http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy it at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

TO JOIN OUR FREE NEWSLETTER which goes to 3,000 people just send an email to david@LettingFocus.com – We do not spam or sell our mailing list to advertisers. Please put us on your “white list” to ensure you receive our emails.

OFFERS ON PRODUCTS FOR LANDLORDS and TO ADVERTISE PRODUCTS: Landlords Resources

GET THE RSS FEED FOR THIS BLOG: Click Here

Copyright of Blog: David Lawrenson 2011. Please link to us here or quote us. We actively pursue copyright infringements. The blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

TWITTER PAGE For my thoughts on property, personal finance, plus as well as other random things from sport, to 80s and 90s Indy Music, to tsunamis and politics please see our Twitter page.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Avoid Void Periods, Housing Association Leasing Schemes, Housing Associations, Housing Benefit, Local Housing Allowance, Local authority Tips for Housing Departments, Private Leasing Schemes, Private Rented Sector Access Schemes, Private Sector Leasing Schemes, Procurement of Temporary Accommodation, Social Letting Agency | Comments Off

Accreditation Private Landlords and the Social Letting Agency Model

Tuesday, August 9th, 2011

Key Point: Most private landlords don’t set high value on things like membership of accreditation schemes and property inspections offered by some councils as part of Local Letting Agency schemes designed to attract landlords. They won’t pay much for these features either – especially where a good private let alternative exists. Local authorities must be realistic about what landlords want and are prepared to pay for.

In the old days before the bankers and offshore tax havens destroyed the economy and when money was still around, local authorities regularly paid incentive fees to private landlords to make their properties available to let to people on housing waiting lists.

In the new tough environment that’s pretty much a thing of the past. Also possibly slowly going (or already gone) by the wayside are things like rent deposit schemes and other sweeteners for private landlords.

Not only do local authorities have less money to throw at landlords but the cuts to the previously generous Local Housing Allowance rates have made their job very much harder, making many landlords opt instead for higher rent “private lets” to people who are not on benefits.

And to make things even worse, local authorities will soon be able to discharge the main homelessness duty into the private rented sector – meaning someone in need of housing will not be able to refuse a reasonable offer of accommodation in the private rented sector.

This change will make the job of local authorities harder still – they will have to do more with a lot less.

Response of Local Authorities – the “Local Letting Agency Model”

The response of some local authorities to some of this is to set themselves up as Local or “Social Letting Agencies” offering a range of services to private landlords as an alternative to private letting agencies. (Letting agents, in many areas, will not deal with tenants on benefits.)

It’s good that local authorities are doing something positive. But we think some may be a tad over ambitious in what they are expecting landlords to pay for.

For example, private landlords will not pay much for things like property inspections, membership of accreditation schemes, repossession assistance and the like as part of the joy of housing a previously homeless person.

Guaranteed Rent

But they might pay, if in exchange for doing so, they get from the council, some element of guaranteed rent.

The reality is that rightly or wrongly, many private landlords see tenants on benefits, and especially previously homeless ones, as coming with high risk, high maintenance and at high costs to the landlord (both in terms of real costs like increased insurance premiums but also the landlords own “time costs”)

And outside of some well publicised and properly marketed university schemes, whilst accreditation schemes for landlords are very laudable (and authorities are rightly doing their best to raise standards), most private landlords are a very parsimonious lot who have little interest in being “accredited” unless there is some real and significant financial or other incentive (e.g. guaranteed rents or other help) in becoming so.

They aren’t that bothered about property inspections either and the mere mention of “assistance with repossession” (as at least one authority proposes) will likely make them run a mile.

The reality for any landlord trying to let anything more than a “downmarket property” in London and many other large town and cities, is that there is a thriving market in private lets. And good tenants from letting agents (or via the landlords own legwork) are easy to find right now, as can be seen from the rate of increases in private sector rents.

In other words, private landlords don’t need to pay councils for the right to get access to what they see as potentially risky tenants and for things like accreditation schemes unless there is real value in it for them.

Getting Real About What Private Landlords Will Pay For

Local authorities have a very hard job to do (and possibly the government is asking too much of them) but they have to get real quickly if they are to measure up to the task that they face in the new housing environment set for them by this government!

In this market, as well as improving the way they market to landlords, they must understand what services landlords want and what they are prepared to pay for. If not, they risk setting up expensive “social letting agencies” that won’t come close to achieving the desired objectives.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Expertise and advice.

Services to Businesses and the Public Sector

We are consultants to 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.

We also write for property websites, speak at property shows and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the top right. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE : http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER which goes to 2,000 people and contains regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

For my random thoughts on property and personal finance, plus other random things that interest me from sports, to 80s and 90s Indy music, to tsunamis, to politics please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011. We pursue any copyright infringements.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Accommodation in private rented sector, Accredited Landlords, Discharge Homelessness Duty, Housing Benefit, Landlord Accreditation, Local Housing Allowance, Local authority Tips for Housing Departments, Private Rented Sector Access Schemes, Private Renting Schemes, Private Sector Leasing Schemes, Social Letting Agency | Comments Off

Discharging Homelessness Duty to the Private Rented Sector – but where is the Property in the PRS

Tuesday, July 5th, 2011

Key Point:  We are concerned that whilst local authorities will, in theory, be able to discharge the homelessness duty into the private rented sector, the reality is that many councils may not have done enough to convince private landlords to make their property available to this end of the lettings market.

On Monday, I featured with a clutch of housing luminaries at the Guardian Housing Network Q&A session, which was all about “working with the private rented sector.”

This really boiled down to trying to figure out what local authorities and housing associations could do to better engage with the private rented sector.

I put my views forward online and the whole debate proved very useful. Followers of our work – whether landlords or organisations – will find the debate enlightening. You can read it in full at the bottom of this post.

At the end of the debate, Chairlady Kate McCann, asked us to summarise the key issues facing councils and other bodies in relation to engaging with the private rented sector.

I wrote some brief notes which you can see near the end of the Q&A and I have now expanded upon these here – as eight key points.

1.      Local authorities and housing associations must start to recognise the central role that government now has for the private rented sector (PRS). Action: Give the PRS more prominence in local housing strategy papers.

2.      Large numbers of private landlords are (1) confused by the huge number of changes to local housing allowance (LHA) rules and rates that have come in over the past two to three years, (2) do not realise they can be paid LHA direct in many cases and, (3) do not understand the difference between private sector Lease Schemes and Direct Let schemes. Action: Design clear communications to try to overcome the misunderstandings that private landlords have.

3.      Even within a single region, neighbouring local authorities, housing associations and other providers often compete with each other by offering different versions of similar products or the same product but with different incentives. This can confuse landlords (as well as being potentially wasteful of resources as the more savvy landlords play one provider off against another.) Action: Harmonise products and services unless you are convinced the benefits of competition outweigh the cost savings and simplicity gains from single products.

4.      Improve the marketing of what’s available for landlords. Even with simplified products it can be hard for landlords to find out exactly what it is that councils offer, especially on the internet. Action: Improve “findability” online. Utilise appropriate search engine optimisation techniques and communicate products clearly and in the online channels where landlords “shop” for their tenants or where they look for information.

5.      Action: Work much harder to counter any negative, misreported news and myths about the behaviour of tenants who are homeless or on Local Housing Allowance. Also, think carefully before signing up to campaigns which highlight the numbers of landlords who may exit the LHA market as these end up being read by landlords too and tend to generate their own momentum, leading to the feared result!

6.    Many mortgage lenders have mortgage terms and conditions which do not allow landlords to let properties to local authorities or housing associations under lease schemes. Some will not allow landlords to let to people on LHA either. Action: Request central government puts pressure on the Council of Mortgage Lenders to change this.

7.   Schemes to access the private rented sector must utilise some experience and perspectives from the landlord community outside of borough Housing Departments. Action: Widen recruitment pool to gain PRS experience and perspective.

8. Action: Understand that failure in delivery of the “back end service” to private landlords can act as a stab in the back for the best designed and best communicated products. For example, not communicating with landlords over why LHA payments have suddenly stopped, trying to claim overpaid LHA when a landlord could not possibly know that tenant’s circumstances have changed, telling a non paying tenant on LHA to ignore court orders and stay until the bailiffs come etc, will undo the best marketing and most innovative of schemes.

But Are Councils Doing Enough Now?

Local authorities will soon have the ability to “discharge the main homelessness duty into the private rented sector.”

This is a huge change and it means an applicant will no longer be able to reject a suitable offer of accommodation in the private rented sector.

The trouble for local authorities is the vast majority of private landlords (for the reasons I have highlighted above) are simply not prepared to make their properties available to this end of the market because they don’t think it’s worth the risk or, more often, because they simply don’t know what’s on offer.

In other words, whilst local authorities may, in theory, be able to discharge their duty, the reality is that there may not be enough PRS accommodation available to discharge it to.

Local authorities must urgently take action to address this issue. At present, we think not enough have grasped the nettle. They know that change is coming and they need to make urgent plans now.

The link to the debate is here: http://www.guardian.co.uk/housing-network/2011/jul/01/live-discussion-working-with-the-private-rented-sector

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Experts and advice.

Services to Businesses and the Public Sector

Primarily, we are consultants to 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.

We also write for property websites, speak at property shows and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts use the tags and categories at the bottom of each post (after the list of links), or over to the top right. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any Category that interests you.

THE HOME PAGE OF OUR MAIN SITE : http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”

Our book is the highest selling property book in the UK. Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

For my random thoughts on property and personal finance, plus other random things that interest me from sports, to 80s and 90s Indy music, to tsunamis, to politics please see our TWITTER PAGE: Twitter

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Posted in Discharge Homelessness Duty, Housing Benefit, Local Housing Allowance, Local authority Tips for Housing Departments, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Private Sector Leasing Schemes, Social Letting Agency | Comments Off

Social Letting Agency An approach for Local Letting Agency Models that works for Landlords

Monday, May 23rd, 2011

Some of our work at LettingFocus involves working with local authorities on setting up local or “social letting agencies” and “private rented sector access schemes.”

The aim of the various schemes is to try to encourage landlords to consider letting to tenants who are on housing benefits, who are vulnerably housed or who “present” to the local authority seeking a roof over their heads.

With the decline of the social housing sector, the housing solution (usually the only solution) the councils can offer will often be the private rented sector. But, the trouble for the councils is that so far the bulk of private landlords have been reluctant to engage with this end of the market, and especially with tenants on housing benefit (or Local Housing Allowance as it’s called.)

There are a variety of reasons for this, some of which we have discussed in previous blog posts here and at various public speaking events.

I don’t propose to go into the reasons why so many landlords don’t like this part of the market again here. Suffice to say that because of landlord antipathy towards the sector, the councils have been trying to come up with attractive incentives to get landlords interested.

Direct Lets and Lease Schemes

In the case of “Direct Lets” to tenants on housing benefit, incentives include payment of deposits, bonds to guarantee the state and condition of the property, the setting up of fast track systems to pay landlords direct and so on.

Also, there are the “Lease Schemes” in which a landlord can get a guaranteed, often fixed, rent for a period of 2, 3 or sometimes even more years.

It’s all designed to get landlords to make their properties available to this part of the population.

But I always explain to councils that there are seven reasons why this job will prove hard. These are as follows:

1 For too long borough’s strategies for using the private rented sector for housing have been tucked away on page 94 of their Housing Strategy papers, as an afterthought (though this is changing)

2. Even when they have a good product for private landlords, the landlords cannot easily find out exactly what it is the councils offer on the Net. Strategies to improve findability online are essential.

3. Even within a single borough, housing associations, council and other providers often compete with each other to offer the best product. This confuses landlords (and can be wasteful of resources too.)

4. The products offered are not communicated clearly and not reaching landlords in the places where landlords “shop” for their tenants or where they look for information.

5. The constant stream of news, much of it negative and misreported on Local Housing Allowance, especially in the last 2 years, has left landlords confused. (Some of the negative media originates with the councils’ own  representative bodies who have unfortunately exacerbated the “worry factor” in a valiant but failed bid to get the Coalition government at Westminster to “think again.”)

6. Recruitment policies for private rented sector access schemes too often look to recruit from borough Housing Departments when what’s needed is a private rented sector perspective.

7. Failure in delivery of the back end service to landlords can act as a stab in the back for the best designed and best communicated products.

The last point is worth dwelling on with some real life examples.

Real Life Examples

Recently I attended a council ran landlords event outside London. It was all going well until near the end when a number of landlords, on hearing the councils plan for the private rented sector, said things along the lines of, “That’s all very well, but why is the council telling my LHA tenant to stay put and wait for the bailiffs” and “Why has the council lost my tenants’ application forms?”

And just two weeks ago, a landlord wrote to me to complain that his East of England local authority was trying to reclaim overpaid rent to him because the tenant had left the property. As he said, “How am I to know this?” (Thanks to CT for the info on that one.)

Another landlord, from Surrey wrote to ask me if I knew a way around Lloyds Banking Group’s bizarre strategy to not allow landlords with mortgages with them to let under the Lease Scheme arrangements. Apparently, his council was no help at all in trying to resolve the problem.

Local authorities need to fix these back end issues too because a landlord who is failed will tell ten other people and destroy any other good work that the council has done.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Expertise and expertise and I’m David Lawrenson, a landlord and property investor myself for over 26 years and best known as the author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 26,000 copies sold (up to Feb 2011).

Services to Businesses and the Public Sector

Primarily we are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord, private rented sector and buy to let product strategies, marketing and services.

We also write for property websites, speak at property shows and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.

AT OUR WEBSITE LETTINGFOCUS.COM:

TO GO TO THE HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts, use the tags and categories at the bottom of each post (after the list of links), or over to the top right. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any specific topic.

THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING” Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.)

For my random thoughts on property and personal finance, plus a host of other random things that interest me from football, to 80s and 90s Indy music, to tsunamis, to politics please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Housing Benefit, Local Housing Allowance, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Social Letting Agency | Comments Off

Local Housing Allowance and Housing Benefit not of interest for Majority of Private Landlords

Wednesday, April 13th, 2011

Many local authorities, housing associations and charities designing strategies to try to get private landlords to let to tenants on Local Housing Allowance are very fond of doing surveys of landlords.

(Readers of this blog will know how critical I was of one particular survey of landlords that, last year, was used to make some astonishing claims for the impact on homelessness in London of the current changes to Housing Benefit / Local Housing Allowance .)

Doing surveys is better than doing no surveys at all (usually!) but these surveys can be limited in value.

Typically the surveys I have seen solicit the views of landlords who the authority already has a relationship with, those few landlords who are accredited with the council (which is usually not many) and perhaps those members of landlords associations who live in the local area.

From the base of responses from these groups, strategies and initiatives are sometimes devised.

Again, all well and good, but the trouble with this approach is that it misses out the views of the majority of landlords who, right now, want nothing to do with tenants on benefits or the town halls.

For most landords, “tenants on benefits” and the various incentives the council provides for landlords are simply “off their radars.”

To illustrate this, a landlord “tenant find” website I know has 100 live properties listed in the London area – all uploaded by landlords.

When uploading properties to the site, the landlords are presented with a box to tick if they accept tenant of benefits. Not one landlord ticked the box. In Greater Manchester there were 20 live properties. Again, it is the same story – no one has ticked the box to say they accepted tenants on benefits.

Well Meaning but Wrong Strategies

Until local authorities understand how to reach landlords like these and find out what they are thinking and why they are so suspicious of the whole Housing Benefit / Local Housing Allowance system, they will be missing out on the big picture.

And if they believe the survey results unquestioningly and even worse – use them as a base to construct strategies for their local private rented sector, “local letting agency models”, social letting agencies and PRS Access Schemes etc – they will undoubtedly devise bad strategies.

Bad strategies for the private rented sector are not a small matter. It is wasteful and bad for society, not least because the PRS is now so big – indeed, as I explain below, it is probably already bigger than the social housing sector.

Given the size of the PRS, it is time strategies for the private rented sector stopped being a footnote on local authority planning documents.

Private Rented Sector Bigger than Social Housing Sector Now

The English Housing Survey, which is published by the Department for Communities and Local Government, indicates that for the first time since the mid 1960s the private rented sector (PRS) is now larger than the local authority / housing association sector.

The latest survey is for 2009/10. At that time there were 3.7 million households in social housing, compared to 3.4 million in the private rented sector – a difference of just 300,000.

A year earlier, the same source found the respective figures were 3.8 million (social housing) and 3.1 million in the PRS – a difference of 700,000.

So, it’s a fair bet to say that if the trend of those years continued into 2010/11 – and there is no reason to think that it hasn’t – we must have already reached the point where the PRS is the larger.

Private companies selling to the private landlord should also afford the private rented sector more space for the development of robust strategies that meet customer needs. In particular, we think this is true of mortgage lending banks and building societies where provision of buy to let mortgages is still so heavily concentrated among a few players.

Next week we will look at the reasons why the PRS has grown so big and why social housing (and owner occupation) continues to decline.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Consultancy and expertise and I’m David Lawrenson, a landlord and property investor myself for over 25 years and best known as the author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 26,000 copies sold (up to Feb 2011).

Services to Businesses and the Public Sector

Primarily we are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord facing or buy to let product strategies, marketing and services.

We also write for property websites and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor. We pride ourselves on giving independent unbiased advice on a one to one basis.

AT OUR WEBSITE LETTINGFOCUS.COM:

TO GO TO THE HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts, use the tags and categories at the bottom of each post (after the list of links), or over to the top right. Here, you can click on “Select Categories” and use the pull down menu to read all the posts on any specific topic.

THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING” Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.

For my random thoughts on property plus a host of other random things,  please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

LINK TO THIS BLOG OR TO OUR WEBSITE

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Posted in Buy to Let Mortgages, Housing Benefit, Local Housing Allowance, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Private Rented Sector Recent History, Social Letting Agency | Comments Off

Government Policy on the Private Rented Sector is Not Joined Up

Tuesday, March 1st, 2011

Sometimes government policy doesn’t seem to join up too well – with different policies apparently conflicting with each other.

Two good examples are (1) the lending activities of state owned banks which appear to hamper what local councils are trying to do with their private rented sector access schemes, especially lease schemes and (2) policies on HMOs which appear to be working against the recent change to the rate of LHA for single people under 35.

Let’s look at the first example first.

State Owned Banks Not Exactly Helping Those in Housing Need

Someone working in temporary housing in Exeter emailed me to complain that a state owned bank, Northern Rock, would not allow her private landlord client (whose buy to let mortgage is with Northern Rock) to let his property under a 3 year lease scheme to the council. And could I help?

First, for non-housing people reading this blog, we will briefly explain what a private lease scheme is.

Under long lease schemes a private landlord can get a guaranteed rent (albeit a little below market rents) from letting to the council or housing association. The council in turn lets the property to people in housing need. The landlord gets no voids for 3 years and the property back at the end or however long the lease term is and everyone should be happy.

But this mortgage lender apparently insists that lettings are only on a standard assured shorthold tenancy or lease of less than a year. Never mind that landlords who have entered into long leases are getting a guaranteed rent (courtesy of the taxpayer ultimately), suffering no voids and won’t have to pay letting fees and are therefore presumably less likely to default on their buy to let mortgages as a result.

As Northern Rock mortgages are now owned by the state, readers of this blog might like to consider the irony that a state owned bank won’t consider these schemes which, of course, are meant to house those in housing need.

According to James Ball at www.LannerCapital.co.uk other part state owned banks who also “Like to say No” to lease schemes of this type and length are Lloyds Banking Group (BM Solutions and HBOS) and Nat West (part of RBS.)

BM Solutions and Northern Rock go further and are among the state owned banks who will also not lend to landlords who wish to let to people on Local Housing Allowance.

Not Joined Up

At the same time, local councils that we advise and many others across the land are very busy trying to attract landlords to their private rented sector schemes (including lease schemes) as a home in the private rented sector is often the only housing option they can offer.

Much money and effort is spent on local councils’ endeavours on this kind of work only to be thwarted by state owned banks that won’t let their landlord customers let to these same people that the councils are trying to help.

Perhaps someone senior in Housing at the government or in local authorities ought to have a word with whomever controls lending at these state owned banks.

HMO Article 4 Directions Seem at Odds with Policy on Local Housing Allowance

Now let’s look at HMOs.

For the uninitiated an HMO is a House in Multiple Occupation – basically a house shared by people who form more than two “households.”

First some background. (Journalists with short attention spans should skip the next two paragraphs.)

The Coalition Government allowed the creation of HMOs without the need for planning permission. But at the same time, they made it easier for local authorities to use planning laws to restrict HMOs locally – through a mechanism called an “Article 4 Direction.”

These Article 4 Directions, where implemented, remove “permitted development rights” in a specific geographical area and require planning permission for the creation of all new HMOs. The Directions are commonly likely only to be applied for and implemented in towns and cities that have a high proportion of shared housing, such as university towns or areas with a large number of low income households.

For those with short attention spans it simply boils down to local councils being able to apply to restrict HMOs in their area.

NLA Objections

Landlords’ groups like the National Landlords Association (the NLA) have expressed concern that the Article 4 Directions are likely to displace students from the streets around universities and push them to other areas where HMOs are currently occupied by tenants dependent on Local Housing Allowance (LHA) to pay their rent and other low income households.

The result, they say could be fewer properties available for those on low incomes – potentially increasing housing waiting lists and costing local authorities significant amounts of money for temporary B&B accommodation.

We think this is possible too.

Worse Still

But at LettingFocus, we think the situation could be made worse still from April 2012 when the shared room rate (room in a shared house) is extended from age 25 up to age 35 – meaning that single people under 35 who are on Local Housing Allowance will be paid a shared room rate rather than a rate for a flat.

This move can only further increase the demand for just this type of HMO at the same time as local Article 4 Directions reduces its supply. Again, this does not seem like joined up policy to us.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Information and expertise and I’m David Lawrenson, a landlord and property investor myself for over 25 years and best known as the author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 26,000 copies sold (to Feb 2011).

Services to Businesses and the Public Sector

Primarily we are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord facing or buy to let product strategies, marketing and services.

We also write for property websites and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor. We pride ourselves on giving independent unbiased Buy to Let Advice on a one to one basis.

AT OUR WEBSITE LETTINGFOCUS.COM:

TO GO TO THE HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts, use the tags and categories at the bottom of each post (after the list of links), or over to the top right, you can click on “Select Categories” and use the pull down menu to read all the posts on any specific topic.

If you want to reply:

If you are on the URL for this specific post, at the bottom of the post, you should see a space to “Leave a Reply.” (If you are on the Blog Home Page, click on the title of this blog first to get to the URL.)

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THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.

For my random thoughts on property plus a host of other random streams of consciousness, please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE?

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Posted in Article 4 Directions, Buy to Let Mortgage Strategy, Buy to Let Mortgage Terms and Conditions, Buy to Let Mortgages, Government Private Rented Policy Not Joined Up, HMO, House In Multiple Occupation, Housing Benefit, Local Housing Allowance, Private Rented Sector Access Schemes, Private Rented Sector Management, Private Renting Schemes, Private Sector Leasing Schemes, Social Letting Agency, Uncategorized | Comments Off

Local Letting Agency Model and Councils. Can Local Authorities Make A Success In This Area

Tuesday, February 22nd, 2011

In this blog post we say that local authorities face big challenges trying to make a success of the “Local Letting Agency” concept – and we highlight the areas they will have to work hardest in if they are to be successful.

Some groups of local authorities are setting up their own local letting agencies – a topic we have written about before at this blog.

One objective of these new letting agencies will be to attract private landlords prepared to let to people on low incomes and / or Local Housing Allowance (LHA). The properties will then be advertised / made available to tenants who are in housing need and who approach the local authority for accommodation.

If the Coalition has its way, by making an offer of suitable accommodation in the private rented sector, a local authority will be able to say it has discharged its housing homelessness duty to a household. This means that in the future for most people who approach the councils for help, if they reject private rented accommodation they will not be able to remain on the social housing waiting list.

The move to set up local letting agencies is tied up with this and it follows the Rugg Review commissioned by the previous government which recommended local authorities should consider setting up local letting agencies to help facilitate this and other objectives to help them better engage with the private rented sector.

Background

Why is all this happening?

Well, obviously, there is a housing shortage. Councils do not have homes available to give to all people in housing need and so the idea is to allow them to discharge their obligations by offering tenants who are in housing need suitable accommodation in the private rented sector.

This is obviously a big political issue and there are some who work in borough housing departments who don’t like it, not least because many of them think accommodation in the private rented sector is less secure and the properties less good (but we won’t delve into that particular discussion here and we should note that there are many others in council’s housing departments who support a discharge of homeless duty into the private sector.)

And whilst some of the more experienced private landlords manage tenants who are on Housing Benefit (or Local Housing Allowance, LHA), the greater chunk of landlords are very wary of letting to people on benefits (or likely to go on benefits.)

Why Many Private Landlords Will Not Let to “Benefit Tenants”

Our analysis of the available research reveals a number of reasons given for why many private landlords and letting agent don’t like to let to tenants who are on benefits unless they are “underwritten” by a home owning guarantor:

  • Payments of LHA are always made in arrears
  • The tenants don’t always have access to a deposit
  • The government’s past decision to (in most cases) pay tenants direct and not the landlords (as was case before 2008) made landords concerned that tenants would spend the LHA payments on something other than rent
  • They think their properties will not be looked after properly and that the tenants are more likely to have “issues”
  • Local Housing Allowance applications are complex, take too long to process and when tenants’ circumstances change, the payments can stop without warning
  • Some landlords think insurers will not insure them if tenants are on LHA or that they cannot get a mortgage for a property to be used to let to tenants on LHA

Some of these concerns have some validity, some much less so. Some are true but can be ameliorated using products available from the local authorities such as “deposit bonds”.

All Change Again

Recently, the government has changed things again – reducing the level of housing benefits (introducing caps, setting payment at the 30th percentile level of local rents instead of at the median, reducing rate for Under 35s to a room rate etc.) This makes letting to LHA tenants even less attractive.

However, other recent changes have once again allowed, in many cases, for payments to be made direct to the landlord again.

So, there has been a lot of change. Indeed, there has been so much change in this area that we are sure the average private landlord is now confused and  not aware that payment can now, once again, be made direct to them in most cases where the tenant has approached the council for help.

Private Letting Agents and a Row in Wales

Also, by way of further background, it is worth noting that the majority of letting agencies nationally will not accept people on benefits. However, in some areas tenants on benefits form the majority of tenants so agents must have to deal with them. (We await some statistics from the Association of Residential Letting Agents (ARLA) on this and will add it to this blog post when we get it.)

One issue is to what extent will local authorities local letting agencies compete with private letting agencies?

One scheme in Neath Port Talbot is causing a bit of a fuss with a group of private local letting agents who claim it is undercutting their business. (See link to story below from “Estate Agent Today” at the very bottom of this post (under the links.))

Some of the criticisms made by the private letting agents will need to be considered very carefully by local authorities setting up their own local letting agencies and a big issue will be the extent to which they will compete with private letting agencies in lettings to non-LHA tenants.

LettingFocus.com

At LettingFocus.com we often work with local authorities to help them better engage with private landlords, in particular helping them understand what landlords want and how to reach them through effective marketing.

Our view is that councils are going to have to work very hard to first reach private landlords and then persuade them to make (and keep making) their properties available to tenants on low income and housing benefits.

It is doable but it is a huge challenge for the councils and from our work to date we think the really hard bits will be in reaching the landords in the first place and then delivering a quality service to them.

It’s not going to be easy for them to do this unless they learn to be marketing savvy and deliver excellent service for the landlords and tenants they are trying to help. They will need to adopt working methods that mirror the best of the best private letting agencies.

It’s possible they can, but only if they bring in new thinking from outside, including in my view, working in partnership with the best private letting agents and others who understand the private rented sector – using them to help with both the design and delivery of schemes.

We are working with some forward thinking local authorities to facilitate this.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Information and expertise and I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 26,000 copies sold (to Feb 2011).

Services to Businesses and the Public Sector

Primarily we are consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord facing or buy to let product strategies, marketing and services.

We also write for property websites and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor. We pride ourselves on giving independent unbiased Buy to Let Advice on a one to one basis.

AT OUR WEBSITE LETTINGFOCUS.COM:

TO GO TO THE HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts, use the tags and categories at the bottom of each post (after the list of links), or over to the top right, you can click on “Select Categories” and use the pull down menu to read all the posts on any specific topic.

If you want to reply:

If you are on the URL for this specific post, at the bottom of the post, you should see a space to “Leave a Reply.” (If you are on the Blog Home Page, click on the title of this blog first to get to the URL.)

Please note, we delete all spam.

THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING”Click here to Find Out More and Buy the Book at Amazon. If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.

For my random thoughts on property plus a host of other random streams of consciousness, please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE?

Here is that link:

http://www.estateagenttoday.co.uk/news_features/Agency-boss-furious-over-cheap-tactics-of-council-run-agent

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Posted in Deposit Bonds, Housing Benefit, Letting Agent Fees, Local Housing Allowance, Local authority Tips for Housing Departments, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Private Rented Sector Management, Private Renting Schemes, Social Letting Agency | Comments Off

How Not to Market to Private Landlords and the Private Rented Sector

Tuesday, February 15th, 2011

Landlord readers of this column will know that LettingFocus’s stance these days is now very much built around consulting with organisations who sell products and services to the private rented sector. Basically we tell them how to do it better!

Our two biggest client groups are banks / financial institutions who sell mortgage loans to landlords (commonly known as “buy to let mortgages”) and local authorities / housing associations who face a huge task trying to get private landlords to make their properties available to people on low incomes who turn up at councils offices in droves needing a roof over their heads. (The local authorities often cannot help them so the private rented sector is now the default option.)

As well as doing consulting work for organisations, I still do some one to one consulting work with private landlords and keep “in the mix” with mortgage brokers too. I really like to do this because it is by talking to landlords and brokers that I get to see first hand why the products and services that the banks, local authorities and other clients groups are trying to sell to landlords miss the target so often.

As an example, on Friday, I had lunch up in the city with a mortgage broker called James Ball. A good guy, he tears his hair out at the banks’ complete lack of understanding about what private landlords need.  “In their mortgage criteria they even still talk about DSS Tenants”, he laments. (DSS Tenants is a term that has long since been replaced in landlords’ vocabulary with Housing Benefit or Local Housing Allowance.)

Fast Forward

Fast forward to later on Friday and I’m perusing a local authority website in the Midlands area that is supposed to attract private landlords to get them to let their properties to people on DSS, sorry, Local Housing Allowance.

This site has been lauded a bit and spoken of in glowing terms in some quarters.

As I’m also working in this area, but for a different group of local authorities to set up something better, I call up the number on the site posing as a tenant. After a 60 second wait to be answered (well it’s better than most utilities cos, I guess) and being handed off to other people three times (including one who couldn’t understand how I got through to him at all), it turns out there are actually no properties on their site at all.

“Oh, I was hoping you were a landlord with some properties to put on our site,” says the man at the other end of the line with more than a hint of disappointment in his voice.

Competition and Solutions

Mmm, I am not surprised. Competing in this on line space against the likes of the free spending big portals like Rightmove and the internet savvy landlord facing sites like Upad, Gumtree and Discount Letting, and hoping somehow to be found by landlord punters was never going to work in the first place.

There are solutions and ways that would allow this local authority to attract landlords, but doing it this way isn’t one of them. The right strategy has to be designed by someone close enough to the private rented sector to understand how it really works for the end customer, the landlord. Often this expertise won’t be found internally within the local authority.

Thinking about my mortgage broker friend again, we talked about how my properties in Kent were probably going to be clobbered, both price and rent wise, by the closure of the only big employer in the area, Pfizer.  Donny Rumsfeldt would call the closure an “unknown unknown” – one I could not have predicted 6 years ago when I bought there, but heh, that’s life!

We chatted some more, James and I.

Then I said, “If I was a smart lender, I would anticipate the negative impact on house prices and rents, so I would cut the loan to value ratio for new applications for mortgage loans in areas where such a thing had happened. And I would raise the loan to value where positive regeneration was happening.”

We thought for a few seconds then laughed. But that would require a clever underwriting approach, which would be unlikely from the kind of bank that still calls Housing Benefit, “the DSS.”

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector Information and expertise and I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years. 25,000 copies sold (to Jan 2011).

Services to Businesses and the Public Sector

Primarily we are  consultants to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers. We help them develop and improve their landlord facing or buy to let product strategies, marketing and services.

We also write for property websites and we are regularly quoted by the media.

Services for Private Landlords

We also find a limited amount of time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor. We pride ourselves on giving independent unbiased Buy to Let Advice on a one to one basis.

AT OUR WEBSITE LETTINGFOCUS.COM:

TO GO TO THE HOME PAGE OF THIS BLOG click here: Blog

To read blog posts on related posts, use the tags and categories at the bottom of each post (after the list of links), or over to the top right, you can click on “Select Categories” and use the pull down menu to read all the posts on any specific topic.

If you want to reply:

If you are on the URL for this specific post, at the bottom of the post, you should see a space to “Leave a Reply.” If you are on the Blog Home Page, go to the very end of this specific post and the biog (i.e. after the tags) and click on “No Comments” or “Comments” which should open a Reply Box. (Spammers please note: We delete all spam.)

THE HOME PAGE OF OUR MAIN SITE click here: http://www.LettingFocus.com

For general info on our CONSULTING SERVICES and also to find a small sample of links to articles where our comments have been featured in the National Press please click here: Consultancy and Seminars

For ONE TO ONE PRIVATE CONSULTANCY FOR PRIVATE LANDLORDS click here: Property Advice

TO READ CLIENT TESTIMONIALS – from both organisations and private landlords click here: Testimonials

BUY “SUCCESSFUL PROPERTY LETTING” A new edition of the book is coming out within the next few weeks. Click here to Buy the Book at Amazon (new edition) plus anything else at that Amazon sell. (If you are from an organisation and would like to bulk buy at least 50 books please ask us for special rates.)

To JOIN our Free NEWSLETTER containing regular news for landlords and details of our Events simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers but please put us on your “white list” to ensure you receive our emails.

Discounted Products for Landlords: Landlords Resources

This blog is updated once a week, usually on a Monday or Tuesday (or more frequently when “hot” news items come up.

For my random thoughts on property plus a host of other things that make me grumpy or happy, please see our TWITTER PAGE: Twitter

Copyright of Blog: David Lawrenson 2011.

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE?

Tags: , , , , , , , , ,
Posted in Accommodation in private rented sector, Buy to Let Mortgage Strategy, Buy to Let Mortgages, Housing Associations, Housing Benefit, Local Housing Allowance, Marketing to the Private Rented Sector, Private Rented Sector Access Schemes, Private Rented Sector Management, Private Sector Leasing Schemes, Social Letting Agency | Comments Off

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