Private Rented Sector Access Schemes

Archive for the ‘Private Rented Sector Access Schemes’ Category

Private Rented Sector Schemes, Local Letting Agencies and Private Landlords

Tuesday, September 14th, 2010

In the housing strategy papers of many a local authority the private rented sector can still be something of an afterthought – often tucked away on page 94 along with Dave Spart and ColemanBalls. (Private Eye Joke)

This is quite curious and may reflect either the previous small size of the private rented sector or a genuine lack of understanding at some town halls about the private rented sector in general and what the sector can do to solve many housing problems. But the great thing about business is that it abhors a vacuum and in recent years lots of clever private companies and entrepreneurs have sprung up offering solutions to local authorities in the private rented sector arena.

In particular private companies offer to help town halls by recruiting private landlords willing to let to pre-screened Housing Benefit dependent tenants and then dealing with all the admin for the landlord and council. Sometimes additional services like rent guarantee insurance are thrown in too.

This is all to the good and many local authorities are only too pleased to hand someone else the job of finding local landlords for them and dealing with the management of tenants.

Where’s the Value for Money?

In our view, however, quite a lot of these Local Letting Agency Schemes are expensive and inefficient – involving high set up costs (which the local authority ultimately has to pay for) and too many “hand offs.”

We think local authorities should look very closely at what’s on offer and whether it is good value for money for the ratepayer. At LettingFocus we cast an independent eye over such proposals for councils as part of our consultancy work and we can suggest alternative, usually cheaper solutions.

Some local authorities are also fond of offering incentives for private landlords to take on tenants who used to be housed in the social sector and who are usually on benefits or low incomes. We are not sure these incentives are really needed.

Shappsy the Landlord’s Friend

The good news for private landlords keeps on coming. Last week, Housing Minister Grant Shapps announced new regulations on shared houses which will mean landlords will no longer have to submit a planning application to rent their properties to unrelated tenants – known as Houses in Multiple Occupation (HMOs). Councils will now only have to use this power where they know high concentrations of shared homes are a problem.

I’m in favour of this move though I’d like to see local authorities given the money and scope to do more to clean up areas that are blighted by poor maintenance and antisocial activity emanating from HMO properties. I also think Mr Shapps made a huge error in not imposing mandatory regulation on letting agents. Tenants and landlords were let down by this move.

Pity the First Time Buyer… But Not This One

In the news last week, the plight of one would be first time buyer (salary £50K) who could not afford to buy his first home made me smile. Living in Central Richmond in a one bed privately rented flat, his rent of £1,200 a month was eating up all his cash and he could not save for a deposit. Erm, ever thought about slumming it and renting somewhere cheaper?

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector and Landlord Information.

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.

Services to Businesses and the Public Sector

Primarily I am a consultant to a range of organisations including banks, building societies, local authorities, social housing providers, institutional investors and insurers – helping them with their landlord facing or buy to let product strategies and services.

For example, I help banks improve their buy to let mortgage lending practices and I help housing associations / local authorities find private landlords (private rented access schemes, local letting agency models etc.)

I also write for property websites and am 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 mentoring / coaching basis or through our (very occasional) group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

You can also use the tags and categories at the bottom of each post to read blog posts on related posts or click on the categories pull down menu over to the top right. (If you want to find relevant posts from before 30 April 2010 you can also click on LettingFocus’s Old Blog - Categories, then search from the list for a topic that interests you.)

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

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 Mentoring

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors (which now take place just once or twice a year): Next Property Investment Seminar and Networking Event

We have OFFERS on a few services and products here: Services and Products for Landlords

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

BUY “SUCCESSFUL PROPERTY LETTING” click here to Buy the Book at Amazon 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 (lower than Amazon)).

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Tags: Choice Based Lettings, HMO, HMOs, houses in multiple occupation, Housing Benefit, Letting Agents, LHA, Local Housing Allowance, Local Letting Agency Model, Local Letting Agency Models, multi let houses, Private Rented Sector Access Schemes, PRS Access Schemes, Social Letting Agencies
Posted in Housing Benefit, Letting Agency Regulation, Local Housing Allowance, Private Rented Sector Access Schemes, Regulation of Letting Agents, Social Letting Agency | 1 Comment »

Research Is Needed Into Implications of Budget Changes to Housing Benefit Rates for London Boroughs

Tuesday, July 13th, 2010

The detail of how the change to Local Housing Allowance / Housing Benefit rates will be managed in practice will be interesting and the government will need to tread very carefully and will have to carefully consider the needs of the old, the sick and the HB claimants with young families in all this or they could be facing a PR disaster. Visions of vulnerable people being forcibly moved from expensive central London boroughs to cheaper neighbouring boroughs sound worrying.

Local Authorities Face A Big Challenge

Local authorities will now also need to get a whole lot smarter with what they call their “private rented sector access schemes” or “social letting agencies” (For the uninitiated these are the schemes they have in place to try to move the large numbers of (often young) people who are stuck in possibly unsuitable council and RSL accommodation because there is no social housing provision available that they could qualify for.)

If they have not already done so, the local authorities, especially in the more expensive London boroughs will need to team up seamlessly with other outer boroughs to find housing solutions for those who will find themselves priced out of some areas.

All local authorities will also be an even greater need to make sure they do all they can to ensure LHA processing systems are fast, especially at making payments direct to private landlords if their Local Housing Allowance dependent tenants don’t pay their rent. If there is a failure to deliver this, private landlords could really start to desert the business of letting to LHA dependent tenants (starting with the more up market boroughs first.)

At LettingFocus we help local authorities and RSLs in this area and we think that a properly thought out strategy for the private rented sector (PRS) – one that makes the most of what it has to offer tenants should be at the heart of any local authority’s housing strategy, not on the periphery as is so often the case.

For councils, getting the strategy right for the PRS should not be that hard because the reality is that even after the budget changes are implemented, many private rented sector landlords outside the most expensive areas should still be happy to let to LHA dependent tenants (yes, even after rents have been set at the 30^th percentile rather than the old median level) just as long as they are paid promptly.

What Private Landlords Want (and Don’t Want)

This is important because many studies have shown that private landlords aren’t too bothered about being incentivised to let to benefit dependent tenants.

It’s our opinion (and this is backed up by research from practitioners in the housing charities) that the rent guarantee schemes, bonds and landlord incentives as used by many local authorities are not the most efficient way of incentivising private landlords.

All landlords really want is their rent to be paid on time, every time and with the minimum of hassle. What private landlords don’t like is void periods and having to pay to recruit new tenants. They do like tenants who pay and who stay for long periods. Tenants who are on LHA stay longer and landlords like this.

But the trouble for private landlords is that they also see tenants on LHA as a “potential hassle” – not the tenants themselves (though some, just like private tenants will have “issues”), but rather the system.

Landlords know the application forms for Housing Benefit are very long, complicated to fill out and that it is all too easy for even the most clued up tenant to fill them out wrong. This makes LHA awards and payments often late with the result that the LHA dependent tenant is perceived by landlords to be too high a risk.

Solutions

But there are solutions for all these things. Take the risk of tenant default, for example. In private rented sector access schemes, it ought to be possible for a local authority to sufficiently reference check a former council housed tenant and provide a private landlord with a cast iron and underwritten guarantee that the tenants won’t default. Insurance ought to be available to cover this, thus giving an added comfort level to the private landlord.

But if the local authority is managing LHA and rent payments properly, we would argue there is no need even for external rent guarantee insurance. In other words, the local authority could “self insure” and save the premiums.

Local authorities have to put in place (where necessary) and then sell the benefits of LHA dependent tenants to private landlords, but all this will count for nothing if the authority cannot make the LHA system of application, award and payment faster.

In recent years lots of private companies have sprung up offering solutions to local authorities in this arena – recruiting landlords willing to let to pre-screened Housing Benefit tenants and dealing with all the admin for the landlord and council.

We think most of these are too expensive and involve too many “hand offs.” In our opinion, local authorities should look very closely at what’s on offer and whether it is good value for money for the ratepayer.

At LettingFocus we cast an independent eye over such proposals for councils.

Villains

Private landlords are often cast as the villains of the housing piece. Is this fair?

Well, some of them sure aren’t angels. But post Thatcher and the sale of swathes of council stock, I don’t see anyone else (including the institutions hungry for tax breaks to induce them to enter the PRS) providing much accommodation just now, so I guess local authorities will just have to learn to live with their private landlords.

Certainly, many private landlords targeted areas where they knew the LHA rates were (previously) pretty generous relative to the capital values of properties. They invested in these areas for the good yields knowing that the level of local LHA dependency was sufficiently high and that the government (by setting LHA based on median local rents) was actually bidding up and in effect, setting rent levels in some areas. And since landlords and tenants knew what was payable (because the figures were published by the Valuation Office), they rather unsurprisingly tended to set rents at the maximum payable by the state under LHA.

Now, following the last budget and the caps on LHA levels, some of these landlords will have to think again – which goes to show the risk to them of developing an investment and lettings business based on what the government does. Some may sell but some could come to realise that in reality they cannot get any more than the new LHA rates from private-non-LHA-dependent tenants. For them, the LHA gravy train doth end here! And so it should despite the protestations from some landlord groups.

How many of these landlords will stop taking LHA dependent tenants and / or sell their properties or just accept that they are not going to get as much in future is a big question but with a bit of quick but targeted research this is a question that can be answered within weeks.

Hand Wringing Must Stop

And those involved in housing at local authorities must surely stop wringing their hands and find out the answers to these questions pretty quickly because the result of the changes to LHA rates could be that a lot more people will be seeking housing in the less expensive boroughs of towns across the UK. These neighbouring boroughs will need plans to manage the increased numbers seeking housing and they will need them fast.

Local Authorities Must Engage With Landlords

People working in local authorities may not like having to depend on private landlords so much. I can understand this and as a landlord myself I agree with most of them that selling off council homes was a huge policy mistake. But that’s what happened and is now history. And so, going forward local authorities and others in the business of the housing will have to accept that they will have to continue to depend on private landlords to house people. Their challenge is to make sure they properly engage with landlords.

On their PRS access schemes, they will need to be sharper at finding good landlords cheaply by revising their own ways of working and in a way that incorporates landlords needs – not using external private companies.

One way to do this would be to use the internet much more effectively and stop mucking about with localised letting schemes, local advertising campaigns and private entrepreneurs solutions to attract landlords. There are much more effective ways available.

Once they have efficient systems to attract landlords, the local authorities should make letting to LHA dependent tenants actually sound like a good idea. And to do this, they must reduce the risk that landlords currently perceive exists in letting to tenants on low income and who are benefit dependent. So, local authorities will also need to improve the marketing message that letting to LHA tenants is actually OK.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector and Landlord Information.

Services to Businesses and the Public Sector

Primarily I am a consultant to banks, local authorities, social housing providers, insurers and other organisations – helping them with their landlord facing or buy to let product strategies and services.

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.) I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

You can also use the tags and categories at the bottom of each post to read blog posts on related posts. (If you want to find relevant posts from before 30 April 2010 you can also click on LettingFocus’s Old Blog - Categories, then search from the list for a topic that interests you.)

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE? IF YOU SELL SERVICES TO LANDLORDS, YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME.PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: Choice Based Lettings, Housing Benefit, LHA, Local Housing Allowance, Local Letting Agency Model, Local Letting Agency Models, Private Rented Sector Access Schemes, PRS Access Schemes, Social Letting Agencies
Posted in Emergency Budget June 2010, Housing Benefit, Local Housing Allowance, Local authority Tips for Housing Departments, Private Rented Sector Access Schemes, Private Renting Schemes, Social Letting Agency | Comments Off

New Local Housing Allowance Rates How the New LHA Rates Have Huge Implications for House Prices and Rents Everywhere

Thursday, July 1st, 2010

Even landlords who don’t let to benefit dependent tenants and tenants who don’t get state aid to pay their rent will be affected by the capping of Local Housing Allowance (LHA) rates.

As a result of the changes to LHA rates, there could be some potentially big changes to local house prices and rents.

Lots of Heat

The whole issue of the government’s reform of the levels of Local Housing Allowance rates has raised a lot of heat on various discussion forums. In some of these, private landlords are cast as the villains of the piece but often it is the last government who gets the flak for their approach to LHA.

The arguments usually go something like this.

Someone – who is usually keen to point out they are a taxpayer - will say, “I cannot afford to live in say, Westminster borough myself, so why should I have to pay out of my taxes for those on benefits to live in such locations?” They will point to the figures that show that the average Greater London rent in the private rented sector is £403pw for a 4 bed and £184pw for a one bed as proof that cheaper accommodation is available, adding something along the lines of, “Hey, cheaper accommodation IS available below the new capped LHA rates – you’ll just have to move for it, like people have to move when they need a new job.”

The very real concern is that as a result of the new caps, some vulnerable people will be forced to move from their old homes in these expensive areas to other areas – one has horror visions of armies of old grandmothers with disabilities and young Mums being forcibly moved to cheaper boroughs further out.

Those who may be asked to move to areas where rents are cheaper will rightly point out that it was not they who sold off the council housing stock so it should not be them who have to suffer. To this, the “taxpayer” inevitably replies, “Sure, and it was the bankers who caused the current economic crisis, but us taxpayers are going to have to pay for that too through higher taxes. It’s a shame you now have to move out of expensive Westminster but that’s life. Welcome to the real world.”

And so the argument goes on.

Big Hit

Landlords letting in central London and other “expensive-to-rent-in” UK boroughs to LHA dependent tenants, whose LHA rates will be hit by the new capped rates will soon face a big hit on LHA rates payable once the new rates are implemented next year. (In places like Westminster we are talking huge numbers of LHA dependent tenants) And tenants in these areas will struggle to make up the difference once rates are cut to below the new cap.

So what will these landlords do? Well, they will have to 1) Accept reduced rents from their old LHA tenants but keep going or 2) Give notice to the LHA tenants and let to non LHA dependent tenants instead or 3) Sell up.

What will the tenants do? Well, if they cannot afford to make up the difference somehow, it looks like they will have to move to different boroughs where they can still get the accommodation they need at below the new LHA cap.

If large numbers do this I can only see additional demand placed on housing in neighbouring boroughs which (for now) have cheaper rents.

So landlords with existing residential property in places like Southwark, Lewisham and Haringey could well see rental demand rise strongly and as a result, house prices going up becuase even if they don’t currently let to LHA dependent tenants, the effect of that extra demand will be to push rents up.

In more expensive to rent in boroughs like Westminster, the opposite will probably happen.

In next weeks’ blog I’ll show how these changes have huge implications for both “expensive-to-rent-in-boroughs” as well as neighbouring cheaper ones and I’ll look at what the local authorities should be doing now to plan for this.

Useful Links for Landlords

This site, run by the London Mayor shows the level of private rented sector rents in different parts of London (using VOA data): http://www.london.gov.uk/rents/

Here, using this site, you can what a tenant can get under LHA in different areas for different bedroom sizes:

https://lha-direct.voa.gov.uk/Secure/LHASearchIntro.aspx

Here are the Likely new rates from next year:

http://www.voa.gov.uk/LHADirect/LHA-emergency-budget-news-2010.htm

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Private Rented Sector and Landlord Information.

Services to Businesses and the Public Sector

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

You can also use the tags and categories to read blog posts on related posts. (To find relevant posts from before 30 April 2010 you can also click on LettingFocus’s Old Blog - Categories, then search from the list for a topic that interests you and click to read all the posts we have written under that Category / Topic.)

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else at Amazon.co.uk

To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com – Please note we WILL NOT send spam or sell our mailing list to advertisers!

IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE? IF YOU SELL SERVICES TO LANDLORDS, YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME.

PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: Choice Based Lettings, Housing Benefit, LHA, Local Housing Allowance, Local Letting Agency Model, Local Letting Agency Models, Private Rented Sector Access Schemes, PRS Access Schemes, Social Letting Agencies
Posted in Emergency Budget June 2010, Housing Benefit, Local Housing Allowance, Private Rented Sector Access Schemes, Private Rented Sector Management, Private Renting Schemes | Comments Off

Housing Benefit Frauds How Widespread Are They Plus Institutional Investment in the PRS May Be Near

Monday, June 14th, 2010

A few weeks ago, a landlord I advise told me how some tenants of his had contacted him with a request to help them make a fraudulent housing benefit claim.

The landlord lets out a property to three people who are all on a single assured shorthold tenancy. The tenants are related to each other. There is a young woman, Miss X (income £38K) and who is a distant relation of the other tenants, who are an older couple each of about 55 year of age.

The older man, Mr. Y is self employed on a low income and his wife, Mrs. Y is a housewife. The older man had suffered an injury and could not work so the landlord got a request which said:

“Dear Mr. Landlord, Mr. Y has had a leg injury and there is a chance that he will receive housing benefit for a couple months. We would be very grateful if you could rewrite the tenancy agreement in Mr. and Mrs. Y’s name.”
The landlord rightly refused, pointing out that 1) It would make him a party to a potential fraud which, if found out, would have very serious consequences for him and his lettings business 2) It is unfair on the tax payer and 3) The tenancy was granted with them all on it and references were taken on their combined income of which the principal earner’s income was a big factor.

Housing Benefit Fraud

What they were proposing is housing benefit fraud, of course, which I suspect is pretty widespread. But how could it be stopped?

One solution is to simplify the tax and benefit system.

Now, I have to say, I’m something of a fan of simplification of the tax system.

Many moons ago, back when I was at University, I recall studying the tax system proposed by the economist, JE Meade.

Meade’s idea was that every person would get a “credit”, an amount of money sufficient for the necessities of life. This might be £15K or it might be £20K, but it would be an amount on which they would pay no tax at all. Exactly how much it would be would be up to society and for MPs to decide.

Along with that – and here is the smart thing – if the amount was set at the right level, most of the means tested benefits system could then be dismantled along with all the huge cost of administering the whole edifice.

These days this policy is probably most associated (in the UK) with the Liberal Democrats.

Downsides

It sounds simple and it is – but the downside is that it would require a big increase in the starting rate of tax – which would definitely be higher than the current 20%.

And of course, whatever the benefits in terms of a simpler and less costly system, to many people, the high starting rate of tax does make it a bit of a “hard sell.”

But I like it. I especially like the way a whole bureaucracy of administrating a complex means tested benefits system gets swept away.

And I really worry that within the current system there is a lot of fraud where people are cheating the system.

Equally, there are people who aren’t claiming for what is rightfully theirs because they cannot be bothered to work through the 100 odd page claim forms – and often these will be the old or infirm.

Housing Benefit Fraud

As part of my consulting business helping local authorities and RSLs with their private rented sector access schemes, I am all too aware of the terrible complexity of the Local Housing Allowance system – which, of course, puts lots of landlords off letting to people in receipt of this benefit.

Armies of people are employed at the town halls administering this maddeningly complex system – helping tenants with the forms and offering assistance to landlords to help them understand it all too.

A simpler tax system that provides a decent safety net standard of living to all should be able to wipe out this particular part of the ludicrous means tested system we have in the UK.

No Money Left

“There’s no money left” the last government said in a note one minister left.

And, of course, there won’t be much for housing.

This is why I feel pretty sure that the current government will soon announce big tax breaks to get institutions investing in the private rented sector.

In the meantime, the Town Halls hardly seem to be busting a gut to deliver private rented sector access schemes. (These are where the private rented sector is used as an option for people coming out of social housing.)

In most local authorities within the housing strategy document and at most of the very many housing conferences, it gets barely a mention.

Perhaps they are already waiting for the institutional investors to come in like the seventh cavalry. Perhaps only then they will get serious about using the private rented sector as an option for people coming out of social housing. Perhaps, dealing with pesky individual small scale private landlords is too much hassle for some of them at the moment.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Landlord Information.

Services to Businesses and the Public Sector

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: Housing Benefit Fraud, LHA, Local Housing Allowance, Local Letting Agency Model, Local Letting Agency Models, Private Rented Sector Access Schemes, PRS Access Schemes, Social Letting Agencies
Posted in Build to Let, Institutional Investment in the Private Rented Sector, Local Housing Allowance, Private Rented Housing Investment Fund (PRSI), Private Rented Sector Access Schemes, Private Rented Sector Initiative | 1 Comment »

Social Lettings Agencies Homelessness Prevention and Role of the Private Rented Sector

Monday, May 24th, 2010

As the Conservative Lib Dem coalition starts to wield the knife on what they see as wasted activity in some parts of the public sector we start to wonder how their cuts will eventually affect housing.

One area that we at LettingFocus.com provide advisory help on for local authorities and housing associations is in the setting up of what are variously called “social letting agencies”, “private rented sector access schemes” and “local letting agency models.”

Public Sector Can Do a Much Better Job

We think that many local authorities could do a much better job in these areas.

In recent months I have attended quite a few housing meetings at local authorities, housing associations and housing charities where the topic of housing is addressed “in the big picture.”

The people working for the taxpayer in the housing field often have some great ideas and in some councils there is a decent level of awareness and appreciation of the role the private rented sector (PRS) could play in meeting housing needs and reducing homelessness and housing waiting lists.

However, the schemes that have been designed to tap into what landlords have to offer and / or the implementation of schemes, whilst well meaning, often miss the target.

We also think the targets set for moving social housing tenants onto the private rented sector are often lacking in ambition.

More could be done easing the pressure elsewhere on housing!

And that’s too bad because the Rugg Review of the private rented sector (and the government’s acceptance of the review) recommended that local authorities and other housing providers make much better use of the PRS.

From our work, we have identified a number of ways in which private rented access schemes could be made to work better.

Two of the key ways involve housing practioners making improvements in how they market to landlords.

Landlord Motivations

Key to success is for housing folk in the town halls to understand the motivations of private landlords – what they want from tenants and what help and support they are seeking from housing departments in the town halls and the housing associations to help them find the right tenants.

Local Housing Allowance

Letting to tenants who are in receipt of benefits like Local Housing Allowance is something that scares many landlords – and yet, the housing benefits system, if delivered right, does not involve a high risk to the landlord at all.

Indeed, it can be less risky (and more profitable due to less void periods and even sometimes higher rents) than letting privately.

Getting the message across to more landlords that low income-ex-local-authority-housed tenants are not high risk is one area that we think could be substantially improved.

Another area that we think is weak is the marketing channels that the local authorities and housing associations use to approach landlords.

In many boroughs quite a lot of effort and cost is put into local approaches to attract landlords (and often there can be a duplicity of effort allowing private landlords to play one provider off against another .)

We think that if the message is right and the support from the local authority is there, cash incentives for landlords should not even be required at all except possibly for special categories of hard to house tenants. (A lot of money could be saved here.)

We also think that much more could be done if only the local authorities understood how to use internet based channels to raise awareness among landlords of the benefits to the landlord of joining up to and putting their properties on a private rented sector access schemes.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Landlord Information.

Services to Businesses and the Public Sector

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: Choice Based Lettings, Julie Rugg, LHA, Local Housing Allowance, Local Letting Agency Model, Private Rented Sector Access Schemes, Private Rented Sector Management, PRS Access Schemes, Rugg Review, Social Letting Agencies
Posted in Local Housing Allowance, Private Rented Sector Access Schemes, Private Rented Sector Management, Rugg Review, Social Letting Agency | Comments Off

PRS Access Schemes, Build to Let and the Rugg Review. LettingFocus Surveys the Wreckage

Friday, April 30th, 2010

Reading the housing section of the Labour party manifesto, one can see that the PR campaign that the British Property Federation (BPF) and their members waged on Labour Grandees has paid off in terms of Labour support for “Build to Let,” which for the uninitiated, is where the Government tries to open up the private rented sector (PRS) to big property firms and institutions.

Curious Move – And What Would Julie Rugg Say?

As I have said before, this is all very curious because Labour has decided to ignore Julie Rugg and the finding of the report they themselves commissioned.

Just to remind you, the Rugg Report said that those small pesky private landlords do a better job of being a landlord than the big boys. To quote her: “Bigger doesn’t necessarily mean better – as can be seen when you look at banks and utility companies. Small landlords are more flexible: they don’t necessarily feel that they have to put up rents year after year. I also think larger investors aren’t impressed by the private rented sector because they simply don’t understand it. Indeed, there is a complete dearth of management skills in the corporate sector” (Julie Rugg quoted in “Residential Property Investor” the RLA magazine March/April 09 edition.)

Fast Growing PRS

And with the private rented sector growing from 8% of all housing stock to 14% plus over the last 20 odd years, you could add that the individuals who make up the bulk of the UK’s army of private landlords is doing quite well on their own and is also coping rather well with the current level of reduced mortgage availability. Read this piece for more on how well they are doing right now: http://bit.ly/dkoFz0

So, like me, you may be wondering, why does the Government need the big property firms to come in and join the private rented sector party? (And, no the answer is not to do with payback for donations to political parties.)

More Stock Needed in the PRS

Well, I guess one answer is that we need even more stock in the private rented sector. (Everyone now accepts that the Thatcher claim that most of us could be homeowners was always utter nonsense.)

The Government will certainly understand this need for more stock as it faces an ever mounting bill for Local Housing Allowance as more tenants – who would in times long gone, be housed in council houses – must now be housed by landlords. And so the Government clearly thinks: More stock in the PRS equals lower rents equals a lower local housing allowance (housing benefit) bill for us to have to foot.

And that’s all true. We do need more houses in the private rented sector. But what I’m not sure about is whether the big property companies and the institutions are the best people to provide it.

Tax, the PRS and Build to Let

It seems that the institutions and big property firms worry greatly about trying to get the Government to give them suitable tax breaks so they can make investing in the private residential sector or “build to let” work for them.

Now, we know the money is there to be made in the private rented sector. (At www.LettingFocus.com we show both corporates and private individuals how to do this.)

But the institutions that wish to join the party and invest, first need to understand how to maximise the “tenant asset” – and that is all about getting the right tenant in the first place and then providing a high level of service focused on their needs. If they can understand that part of the work and learn to get it right (doable but not easy), they can make money in the PRS without recourse to special tax breaks or other unique treatments doled out by Government. (Indeed we argue that these tax breaks are unfair on the UK’s small scale landlords.)

Who Will Help the Big Property Firms Get It Right?

Who can help these big institutions and property firms, who are much more used to commercial property, get the knowledge to allow them to be good in the private rented sector?

Well, managers of public housing assets (such as housing associations) could be candidates for this role, but I would suggest that managing tenants in the private rented sector is a tad different and calls for a slightly different approach and treatment.

At LettingFocus we work as consultant in the area around Private Rented Sector Access Schemes for the local authorities and housing associations. We know these bodies do a lot of good work in this area but we have found that they lack a really close understanding of the needs of landlords and are often inefficient in recruiting them. Indeed, the way many private rented access schemes are currently set up are a long way from being the optimum method of recruiting landlords and in some cases are incredibly wasteful of taxpayers’ cash.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Landlord Information.

Services to Businesses and the Public Sector

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: BPF, Build to Let, Julie Rugg, LHA, Local Housing Allowance, Private Rented Housing Investment Fund (PRSI), Private Rented Sector Access Schemes, Private Rented Sector Initiative, Private Rented Sector Management, PRS Access Schemes, Rugg Review, Social Letting Agencies
Posted in Build to Let, Institutional Investment in the Private Rented Sector, Private Rented Housing Investment Fund (PRSI), Private Rented Sector Access Schemes, Private Rented Sector Initiative, Private Rented Sector Management, Rugg Review, Social Letting Agency | Comments Off

Private Rented Sector Access Scheme – Reaching Landlords is the Key. Plus A Comment on HMOs and Shared Houses

Thursday, April 29th, 2010

I’m extremely busy with corporate work right now.

I am working with banks, insurance companies and with the public sector to help them improve their landlord facing products.

For local authorities and housing associations this typically involves helping them make a better job of Local Letting Agency Models, Private Rented Sector Access Schemes, Choice Based Lettings and Supported Access Schemes – which really boils down to getting landlords to let their properties to people on their housing waiting lists.

Many clients in the public sector have a fair understanding of what landlords want but the main area they could do a much better job of is to understand how to get large numbers of good landlords on their books.

For the banks and insurers my work usually involves improving the strategy, marketing, product design and training issues around buy to let mortgage and landlords insurance products.

Understanding among the banks of the landlord sector is usually quite poor (and apart from a few banks they tend to be less inclined to accept new thinking than is the case with the public sector).

Lack of Understanding

This lack of understanding of what landlords want is in my view is partly because in the past they have typically relied on mortgage brokers to sell buy to let mortgages and because they still use the same systems that they use for residential mortgages.

For example, most banks send statements at end of the calendar year not end of the tax year – which is, of course, totally inconvenient for landlords who all have to complete a tax return.

But it is still nice to help private landlords from time to time (though my time to do this is ever more limited and I simply don’t have the time to answer every email.)

Multiple Tenants in a Shared House

One enquirer recently wrote to me enquiring about multiple tenants in a shared house and the situation where there are four co-tenants that are living in a house.

When the lease was up, two of them who were now married wanted to sign the lease without the other two but one of the others says that he is not leaving.

He asked me, “If the lease is signed without the others, do they have any right to stay? If they do stay how can you get rid of them?”

This case highlights one of the dangers with shared houses and HMOS because no matter how you do it this sort of situation does come up a lot.

Basically though, this is not the landlords problem.

The fact is, unless stated otherwise in the agreement all tenants are jointly and severally liable so must all start and end the contract together.

This means they are all in practice individually responsible for whole rent until such time that all of them end the agreement, even if one or more does not live there anymore.

So the onus is on tenants to agree about leaving among themselves and if they can’t, that is tough on them – they should not have entered into the agreement with the others in the first place!

In this instance, if the landlord really wants to force a resolution (and he doesn’t have to), the only way out is for him to give them ALL notice under S21 and follow normal steps to recovery.

Then once the old agreement ends, he can start a new agreement with whoever he likes.

This case is a pretty good example of why shared houses are a headache.

And despite what the promoters of HMOs say, large shared houses involve a lot more of this kind of work which in practice eats into the extra yield you can earn from HMOs and shared houses.

Election Fever

So, the election is on us already and the newspapers are now more biased than ever – reflecting their particular political allegiances.

I was reading the “Telegraph” the other day (someone left it on the train) and after having read it, I can see how readers of it could really feel that we are on the edge of Economic Armageddon in the UK. All caused by “This Labour Government” as the Telegraph would undoubtedly put it.

That’s why I stick to the non political FT – to understand what is really happening in the economy. I love to read it on a Saturday. And though things are bad, they are not that bad!

However, even in the FT, there are some bits I skip.

For example, I can never see the point of studying charts to predict a stock or currency’s future performance.

What happens to a stock’s price, just like in property, is driven by fundamentals and cannot be sensibly predicted by charts in any way.

Well, that’s my view, at least.

MORE ABOUT LETTINGFOCUS AND WHAT WE DO

LettingFocus.com is the home of Landlord Information.

Services to Businesses and the Public Sector

For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.

Services for Private Landlords

We also find some spare 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 mentoring / coaching basis or through our occasional group seminars.

AT OUR WEBSITE LETTINGFOCUS.COM:

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

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page

For general info on our CONSULTING SERVICES click here: Consultancy and Seminars

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

NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event

We have OFFERS on services and products here: Services and Products for Landlords

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

PLEASE GET IN TOUCH!

See our TWITTER PAGE: Twitter

Tags: Choice Based Lettings, HMO, HMOs, houses in multiple occupation, Local Letting Agency Model, Local Letting Agency Models, multi let houses, Private Rented Sector Access Schemes, Private Rented Sector Management, Social Letting Agencies, Tenancy Agreements
Posted in Private Rented Sector Access Schemes, Private Rented Sector Management, Social Letting Agency | Comments Off

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