Social Lettings Agency A Better Choice Lettings and Property Management (ABC Lettings)

1. Social Lettings Agency A Better Choice Lettings and Property Management (ABC Lettings) Sharon Williams Housing Operations Manager

2. Ashford context 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

3. Why a Social Lettings Agency? 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

4. 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

5. ‘A Better Choice Lettings and Property ManagementService’ Provides two levels of service Option 1 – Tenant Find or Let Only Service Option 2 – Fully Managed service Complements Landlord Liaison role

6. Option 1 Tenant Find or Let Only Service 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

7. Option 2 Fully Managed Service 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%)

8. 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

9. Key Points 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

10. How did we do it? 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

11. How did we do it? 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

12. 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: 5.5% provision Landlord set up Fee: £208 + £42 vat Management Fee: 12.5% Court costs : £210 per eviction x 2% eviction rate

13. Lessons So Far…. 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

14. 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

15. 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

16. 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

17. Contact us: abclettings@ashford.gov.uk Or Telephone 01233 330688