Letting of 1 bed properties through Manchester Move
1st April 2015 – 30th November 2015
It was announced in the CSR in Nov 2015 that the Government intended to change
the Housing Benefit rules for single people under 35. The move means that housing
benefit for single people in social housing under 35 without children will be restricted
to shared accommodation rates. This means they will only be able to claim the same
amount of benefit as a private tenant is able to claim for a room in a shared house.
This new rule will apply to all new tenancies from April 2016 and will come into force
in April 2018. This change potentially has a significant impact for landlords with
stock in Manchester.
This paper isn’t a comprehensive look at the issue but aims to pick up the main
points that are highlighted when looking at recent lettings that have taken place
through Manchester Move. It highlights a number of issues that will need further
thought from landlords and strategically as a Housing Access board.
As this legislation is in place from April 2016 we should expect to know about any
exemptions early in the New Year.
Lettings
Between April 1st and November 30th 2015 288 x 1 bed properties were let through
MM to people under 35. While a number of these may have been let to couples the
vast majority will have been let to single people. All also have the potential to be let
to single people. A further 280 1 bed properties had an age restriction higher than35
– this paper does not look at those)
There are also no figures available as to which of these were working households
and therefore maybe wouldn’t be in receipt of HB - although even if a percentage
are in this category they become a risk to landlords should they lose their job.
This paper looking at these particular lettings is attempting to look at the
consequences if these lettings were subject to this new rule and to raise questions
for landlords in advance of April 2016.
As well as these 1 bed properties a further 45 x 2 bed multi storey properties were let
– all also let in the main to single people.
Broad Market Rental Areas (BMRA)
There are 2 BMRAs that cover Manchester and set Local Housing Allowance levels
(LHA)
Central - £67.20 - Covers all of Manchester except Wythenshawe.
South - £57.84 – Covers Wythenshawe.
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This is the rate (although it is subject to change every April ) that the rent for a single
person will be set at whatever size of property that they move into. The following
tables look at what this means when applied to lettings between April and November
2015.
This is split into 3 areas:
1) Northwards
2) Wythenshawe area
3) Central BMRA except Northwards)
1) Northwards
Northwards let 61 x 1 bed properties through MM to people 35 or younger between
April and November 2015.
Average rent
LHA rate
£67.38
£67.20
Number let
higher than
LHA rate
39
Lowest Rent
Highest Rent
£64.81
£69.31
With the planned rent reductions over the next 4 years of 1% a year this would bring
down the highest rent by around £2.60 a week. If the LHA rate does not change this
will make all these 61 properties affordable for people on full HB as the highest rent
would be approx. £66.71.
2) Wythenshawe
There were 44 x 1 bed properties let through MM to people 35 or younger between
April and November 2015.
Average rent
LHA rate
£74.28
£57.84
Number let
higher than
LHA rate
44
Lowest Rent
Highest Rent
£66.71
£91.43
With the planned rent reductions over the next 4 years of 1% a year this would bring
down the highest rent by around £3.60 a week. If the LHA rate does not change this
will make none of these 44 properties affordable for people on full HB.
Even the lowest rents (£64.11 by 2019) will be £6.27 a week above HB levels with
the average rent being £13.44 a week above the south LHA level.
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3) Central BMRA (not inc Northwards)
There were 183 x 1 bed properties let through MM to people 35 or younger between
April and November 2015.
Average rent
LHA rate
£74.85
£67.20
Number let
higher than
LHA rate
29
Lowest Rent
Highest Rent
£61.01
£103.84
With the planned rent reductions over the next 4 years of 1% a year this would bring
down the highest rent by around £4 a week. If the LHA rate does not change this will
make only 53 of these 183 properties affordable for people on full HB. (ie: they won’t
have to make any contribution towards the rent)
Therefore at the current time all of these 288 properties in the 3 areas outlined above
would be available to single people under 35 should they need to claim HB – these
changes will mean that just 40% of them will be from April 2016 should landlords roll
out strict affordability criteria.
Where will properties be available?
In area 3 above (central BMRA – not Northwards) 183 properties were let – the table
below shows where these were and how many would still be available from April
2016.
Lettings Area
Number available
now
Ardwick – Grove
Village
Ardwick
Beswick
Brunswick
Clayton
Cheetham Hill
Cheetwood
City centre
Chorlton
Gorton
Fallowfield
Didsbury
Harpurhey
1
Number potentially
available post April
2016 to applicants
on HB.
1
5
10
12
3
4
1
2
10
28
3
1
3
0
6
12
2
0
0
0
0
14
0
0
0
3
Hulme
Levenshulme
Longsight
Mosside
Monsall
Crumpsall
Miles Platting
Newton Heath
Openshaw
Rusholme
Whalley Range
TOTALs
27
5
15
16
2
6
8
3
5
2
11
183
4
0
1
0
0
0
8
1
1
0
3
53 (29%)
Which Landlords are affected?
From the data above it shows that Northwards isn’t really affected at all and that
WCHG is affected substantially due to the different LHA levels. The following table
shows where the affect is via other landlords in the Central BMRA.
Landlord
Number available
now
Adactus (inc PFI)
Arcon
Contour
One Manchester
13
3
3
76
Great Places
Guinness
Non MHR landlords
Mosscare
Places for People
People First
S4B
YHG
Southway
St Vincents
Irwell Valley
Affinity Sutton
Total
13
18
8
14
3
1
12
10
7
2
No lettings
No lettings
183
Number potentially
available post April
2016 to applicants
on HB.
9
0
0
24 (mainly
Easlands)
0
2
1
0
1
0
12
4
0
0
0
0
53
Age profile
The current average age of these 288 tenants is 25 (well below the cut off of 35) so if
this was post April 2016 there would be significant extra risk for landlords.
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57 (20%) are over 32 and 79 (27%) are 21 and under.
Lettings:
90% of these lettings have been made to an applicant in housing need (Bands 1-3) the split is as follows:
Band
1
2
3
4
5
Total
Number
27
98
137
22
4
288
%
9%
34%
48%
8%
1%
100%
Tenure
The previous tenure breakdown is as follows:
Tenure
Lodger
Current MM Partner tenant
MCC TA
Other hostel /SA
Private tenant
Other
Unknown
Total
Number
68
50
58
53
17
32
10
288
%
23%
17%
20%
18%
6%
11%
3.5%
100%
What this does show is that 111 new tenants have been rehoused from TA or
supported accommodation. When looking at where they were rehoused to - just 29
of these 111 would be under the current LHA level. This means that potentially that
82 of these tenancies would not have taken place bringing significant issues for
access to move on accommodation.
The only landlords that would have potentially rehoused these tenants where the
change in rent would not have mattered are:
Northwards: 16
OM – 4
S4B – 8
Adactus – 1
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Questions:
1) What will landlords decide to do from April - both with HB tenants and those
working that are under 35?
2) Will landlords decide to make the change from April 2016 or later?
3) Will landlords consider lowering their 1 bed rents?
4) When will we know what exemptions there will be for new tenants – leaving
care etc – and for how long – 12 months?
5) Are we confident that the LHA 30th percentile rule won’t change to make more
unaffordable?
6) LHA is set every April for 12 months - can be subject to going up or down.
7) A number of areas of the City and a number of landlords will have no
affordable 1 bed properties for people on HB – consequences for move on
accommodation?
8) Most people will be on UC by April 2018 which will make the administration
more complex.
While this paper concentrates on 1 bed properties there are also a number of 2 bed
properties that are also let to single people – these are in the main multis but can
also be low rise flats and maisonettes. A quick look at these puts all 45 x 2 bed multi
flats that have been let between April and November 2015 above the LHA levels average 2 bed multi rent in South Manchester is £73.98 and in Central Manchester is
£77.83.
While most of these will now be let to working households since the onset of the
bedroom tax there is always a risk that the tenant will come out of work and claim
HB.
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