Social Lettings Agency
A Better Choice Lettings and Property Management
(ABC Lettings)
Sharon Williams
Housing Operations Manager
Housing Services
• Ashford context
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Population of 117,956
A mix of urban and large rural area
Growth area and good connection to London
Number in TA - 120
Of which 74 in good quality long term PSL’s
22 in B&B
No designated temporary accommodation / hostels and only 2
supported housing schemes
– Number of housing advice approaches – 300 per month
– Homelessness of claims – 25 per month
– Homeless preventions – 182 per month
Housing Services
Why a Social Lettings Agency?
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Stabilise and potentially reduce further growth in B&B
Potential risks of welfare reform
Localism Act power to discharge duty into the PRS
Maximise access to PRS – Strong indications locally that accessing
the PRS for longer term sustainable housing is becoming more
difficult
• Build on an already successful working relationship with PRS locally
• Changes to the TA Subsidy Scheme
Housing Services
Our Aims for a Social Lettings Agency
• To develop a scheme which operates in a similar way to
a high street lettings agency
• Focus to provide access to affordable private rented for
tenants normally seen as a higher risk by letting agents
• Not for profit scheme
• Find the niche in the market to provide a competitive
offer to landlords
Housing Services
‘A Better Choice Lettings and Property
Management Service’
• Provides two levels of service
Option 1 – Tenant Find or Let Only Service
Option 2 – Fully Managed service
• Complements Landlord Liaison role
Housing Services
Option 1
Tenant Find or Let Only Service
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We will carry out basic verification checks
We will offer a deposit bond of 1 months rent
Provision of tenant induction training
Access to tenant mentoring scheme
Provision of tenancy agreement template
Advice and support if problems arise
Housing Services
Option 2
Fully Managed Service
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Source tenant
Tenancy set up paperwork / HB claim
Provide a full management service
Provide tenancy induction training
• Guaranteed rental income for landlord
• Damage guarantee of up to 1 months rent
• Eviction service included at no extra cost – no hidden extras
• Offer repairs service for an additional charge (cost +10%)
Housing Services
Costs to Landlord
Option 1
– No Charge
Option 2
- Set up fee £250
- Management fee between 10% and 12.5% of the
rent plus VAT
- Repairs option
Housing Services
Key Points
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Built in flexibility for staff to negotiate to keep scheme competitive
Set parameters for staff to work within
Branding important to reflect the product we offer
Decided on a slow gradual growth of numbers to understand and
manage risks
• Proposals built on consultation feedback that landlords had a
healthy perception of the Council being steady and accountable
• Projection that the scheme would be self financing over time and
gained agreement internally that any surpluses to be offset against
risks
• Long term prospects to set up as a housing company
Housing Services
How did we do it?
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Conducted a feasibility survey
Consulted local landlords and lettings agencies
Set up a multi disciplinary internal working group
Internal member group to sell the concept and gain support
Developed a risk matrix
Considered financial projections based on identified assumptions
Identified a property standard based on the Decent Homes Standard
Procedures include conducting a Housing, Health and Safety
Hazard Rating System inspection
Housing Services
How did we do it?
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Decided to grow slowly using existing staff resources
Re-structured team to support this
Training programme for staff
Launch event for landlords and letting agents
Built in review processes to test assumptions made
Marketing – Landlord Pack, Landlord newsletter, follow up with
known contacts
• Key documents set up – management contract, tenancy
agreements, notices, inspection reports
• Set up tenant risk assessment process
Housing Services
3 Year Financial Projections
Assumptions Made:
• Rental income based on steady growth over 3 years based on LHA
rate and even mix of 1B, 2B & 3B homes
• Uncollected rent provision: 6% provision
• Loss of income on voids:
• Landlord set up Fee:
• Management Fee:
5.5% provision
£208 + £42 vat
12.5%
• Court costs :
£210 per eviction x 2% eviction rate
Housing Services
• Lessons So Far….
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Some of our assumptions were wrong!!!
Often a long lead in time between contact with a landlord and them being
ready to go!
Landlords slow to understand risks from Universal Credit
Landlords still attracted to achieving higher than LHA rents
Differential between Market rent and LHA rents – Can be up to £100 more!
Market heavily hit by recession and letting agents struggling to attract
business and reducing fees
Housing computer system issues – set up for Council tenancies not PRS –
production of a SLA Module with Locata
Must have an ongoing review of the market to keep competitive edge
VAT on fees
Housing Services
Examples
3 Bed Property
• Set up fee £250 (we do the inventory and all paperwork)
• Rent
£700pm
Less:
• Monthly Management Fee 12.5%
£ 87.50
• VAT
£17.50
---------• Net guaranteed rent to Landlord
£595
• LHA rate
£700
• Alternative Cost of B&B pw
£303
Housing Services
Examples
2 Bed Property
• Set up fee £50 (inventory provided by LL)
• Rent
£635pm
Less:
• Monthly management fee 10%
£63.50
• VAT
£12.70
-------• Net rent guaranteed to Landlord
£558.80
• LHA rate
£600
• Alternative Cost of B&B pw
£163
Housing Services
Examples
Studio Flat
• Set up fee £62.50 (portfolio landlord – negotiated rate)
• Rent
£450pm
Less:
• Monthly management fee 10%
£45.00
• VAT
£ 9.00
-------• Net rent guaranteed to Landlord
£396
• LHA rate
£495
• Alternative Cost of B&B pw
£80
Housing Services
Contact us:
abclettings@ashford.gov.uk
Or
Telephone 01233 330688
Housing Services