Calls for reductions in housing costs to boost the economy and reduce poverty have been on the increase. So how will the UK’s social housing sector approach rent increases due in April 2014? Peter Hall reviews the facts and alternatives available.

"Reducing Housing Costs

Faisal Islam led the way on calls for this last year, outlining how reducing housing costs would boost the economy via increased disposable incomes. Shelter joined in with a blog on boosting wages or cutting rents and even Helen Barnard from the JRF recently highlighted in a New Statesman article that increasing the minimum wage won’t be enough to tackle ‘poverty –  reductions in housing costs will also be required.

Or Increasing Housing Costs

It’s time of the year when the good and great in social housing up & down the country will be facing the elephant in the room – proposed rent increases from April 2014...."

Are the financially deluded having conversations with the financially excluded? What will they talk about then...?
Barry Marlow outlines the case for overcoming the financial delusion which has persisted in UK social housing.

Recent reports show the number of pre-eviction notices soaring by 26% across UK social housing.
We estimate that  the total cost of each eviction and subsequent homelessness provision now stands at £23k in the UK.
Here we outline why it’s time  to deliver better financial and social returns than the traditional eviction process, which results in the equivalent population of Stamford being removed from their homes each year, and nobody knowing where they've gone.

Data from the DWP reveals the detailed impact of the bedroom tax across England.

• 412,000 affected households
• Average cost per year for tenants £824
  
• A total of £328m being taken out of tenant's pockets and local economies
• The North West worst hit financially at £63m, Followed by London at £56m
  

Click below for full details

Trouble letting homes? Arrears Rising? Tenancy Turnover up?

12% of #ukhousing landlords are reporting higher arrears and voids levels in the latest @HCA_UK  quarterly survey.

Don't let £'s go to waste. Prevention is better than cure. Get straight talking operational & proven strategic solutions from as little as £200 per day with payment by results.

Call: Peter on 07764 945725 or Barry on 07702 043650

On this first annual UK #housingday,  aside from general and individual experiences being shared across the #socialhousing sector, what exactly will the sector as a whole be doing?

We thought it would be interesting to take data from the @HCA_UK 's  Statistical Data Return dataset 2013 to shed some light.

So we've 'mined' that annual data and divided it by 263 working days to produce a daily snap shot of the basics which staff up and down England will be doing today.

Letting Homes
On this day, staff will be letting homes at social rents to 1047 people who otherwise can't afford one or need some form of support, and 113 to new tenants at 'affordable' rents ( generally 80% of the market rent)

They'll also be completing 85 mutual exchanges with tenants who are swapping their homes for a variety of reasons - either their current one is too small, too big, too far away from work or neighbours etc. In light of the #bedroomtax and the need for many of those affected needing to move, there may be even more.

They'll be taking handover of 181 newly built or acquired  homes: 151 for rent and 30 for sale on a shared ownership basis.

Managing Homes
On this day, staff will be coordinating and delivering 26,000 responsive repairs for tenants (based on a sector average of 3 per year per property).
They'll also be starting the repairs and reletting process for 104 homes which will become empty as the former tenant leaves for whatever reason. 90 of those homes will be converted from a social housing rent to an affordable rent.

They'll be completing the sales process for 12 existing tenants (through the Right to Buy/Right to Acquire etc), as well as 31 sales of initial shares in a low cost shared ownership home, and 'staircasing' sales to 11 existing shared owners who have decided to buy the remaining shares and own their property outright.

The Sad Side.....
Unfortunately, staff will  be evicting 34 tenants today. 25 for rent arrears. 5 for antisocial behaviour. 4 for other reasons.
They'll also be handling 51 empty properties  becoming vacant which their organisation will decide for whatever reason are not currently available to let, and the demolition of 18 homes.
Not the outcomes many would like to see, but the sad reality nevertheless.

I came across this view on a half term break in Devon last week. Outstanding isn’t it? Imagine waking up to that each day and then watching the sun set from it each evening.

It’s even more impressive when you realise it’s the view from the front of a 3 bed North Devon Council House on Worth Road in Ilfracombe as below.

And the rent for this home is only £94 per week,compared to the average (according to Zoopla) in the area of £600pcm.

Not many social housing properties will have views like this, but it’s a view many prospective owners and private renters ineligible for ‘social housing’ nearby will pay very handsomely for. Yet there are two similar social housing properties with uninspiring views currently on the DevonHomeChoice listings at the very same rent per week.

Is it time to release the shackle on social housing rents that is ‘rent restructuring’ and move towards a market based approach which mirrors valuation methodologies of homes for sale and private rents? Properties in well managed and maintained neighbourhoods or with good views like this could attract premium rents. Others would need to have rents adjusted based on demand. If demand is low, or the property or even neighbourhood poorly managed/maintained, rents would need to reflect what people are prepared to pay. Not some abstract Whitehall construed formula  based on valuations of properties in 2001, average incomes, and the number of bedrooms as is currently the case, and which many landlords have not managed to implement fully yet.

The NHF recently called for HA’s to be free to set their own rents, and as L&Q CE David Montague recently outlined, rent policy at the moment is based on the luck of the draw anyway. Those who say it will be inequitable to charge differential rents please do read the link above  - the inequity of neighbours in the same properties paying different rents is already happening depending on when they got their tenancy. Pay to stay proposals will extend these differentials on the basis of tenant’s income. Is it OK to charge a higher rent based on high income, but not a lower rent based on lower incomes or demand?    

Setting rents based on demand could be as transparent as you can get for customers. Some winners, some losers – depending on the emphasis given to ‘social returns’ on investment by their landlords.  And that's the tip of the iceberg of potential benefits: freeing up higher returns on assets to deliver more new homes, better Vfm, and socially responsible commercial approaches etc?

Even if you don't agree, at the very least, this view from Worth Road could be a contender in a 'best view from social housing in the UK' photo competition?

About the Author

Peter Hall is MD of PHHS: follow him via @Phhsl

Follow the conversation about this article on LinkedIn at The Social Housing Store

When Eastlands Homes placed an article in its tenants newsletter earlier this year asking tenants to think about whether they could really afford Sky, cigarettes, bingo, drinks and other non-essentials, it caused an 'interesting' debate on what is essential in the context of paying your way

Stephen Covey once said, “Trust is the glue of life. It’s the most essential ingredient in effective communication”. In this article, Barry Marlow outlines how success in managing and advising someone else on their budget takes skill and trust, and if you really want to engage with tenants in debt who might be reluctant to talk to you, don't pre-judge them.

"Big Data". The new buzzword in the housing sector. As Bernard Marr states, it is still such a foggy term that it attracts many myths ranging from ‘big data is not useful to anyone’ to ‘big data will help us solve all our problems’. Like most things, the truth can be found somewhere in the middle.
Housing organisations like all other businesses can already delve into existing data repositories and transactions using big data techniques to extract maximum analysis, insight & value for money. Here we outline how.

Commercialisation. It’s the new buzz word in the social housing sector alongside ’big data’.

But aside from diversifying into areas such as market rent , shared ownership and build for sale, is there a real understanding of the extent of commercialisation required?

Is there an inevitable need to adopt a more commercial approach merely to survive?