Affordable rents: WHG experiences so far

Presented by Anthony Riley (Group Director of Development & Operations)

Gurmeet Virdi (Director of Operations – East Midlands)

Contents

• Finance – how does the programme stack up for WHG

• Delivery - What does it look like for WHG• Affordable Rents –contemporary data on

rents across the region for WHG• Affordable Tenancies – feedback from

customers of WHG• Policy – what is next?

Finance: why are we doing them?

Finance: the HCA criteria

• Up to 80% of market rents

• Inclusive of service charges

• Linked to new fixed term tenancy agreements

• Must include some conversions

• Rents to be rebased on re-let (or renewal of tenancy)

• Can be increased by up to RPI +0.5%

Finance: the WHG criteria

• New tenure: Renewable 5 year AST• Assessment of voids for conversion to affordable rent • Capping increase at +25% current social rent (re-lets

only) and < £20 pw• < 95% LHA (re-lets and new build)• Used staff and local RICS Agents, not Zoopla, Savills• Target 200 conversions from Social to Affordable Rent

per annum

Delivery: Total referrals (Sept 2011 - Aug 2012)

Delivery : WHG – returned as SR

Delivery: Lettings (Oct 2011 to end Aug 2012)

Q) Average length for a SR tenancy?Q) % rental increase in real terms?Q) Number of refusals?

AssociationNumber let as conversions

Average income increase per property

per weekWHA 35 £10.41DMHS 27 £8.83NLHT 62 £8.92TOTAL 124

AR v the market rent:an analysis of the market rents in Leicester and Nottingham

Property sizeRent (PCM) Deposit All charges

TOTAL (for first month)

Averages for 1 B/R

£492 £595 £203 £1,289

Averages for 2 B/R

£558 £704 £274 £1,536

Averages for 3 B/R

£648 £759 £313 £1,720

AR v the market rent:an analysis of the market rents in Leicester and Nottingham

Property size Averages for 1 B/R Averages for 2 B/R Averages for 3 B/R

Rent (PCM) £492 £558 £648

Deposit £595 £704 £759

All charges £203 £274 £313

TOTAL (for first month) £1,289 £1,536 £1,720

       

equivalent increase per week* £6.53 £7.22 £7.58

equivalent increase per calender month* £28.30 (5.8%) £31.30 (5.6%) £32.87 ((5.1%)

*for a joint tenancy renewed annually with one change per year over 5 years

AR v market rentadditional costs on top of advertised rent and deposit

Schedule Of Indicative ChargesCharge Description Details Amount•Extension Fee per tenant For each fixed term extension £75plus VAT per tenant•Extension Fee per tenancy For a periodic tenancy £150 plus VAT Check Out Fee

deducted from deposit £75 plus VAT•Late Payment of Rent 1st offence !! £75 plus VAT•Late Payment of Rent all subsequent offences £150 plus VAT•Premature cancellation due if you cancel your instruction of Standing Order without landlord's permission £150 plus VAT

AR v market rent……more costs

Schedule Of Indicative* ChargesCharge Description Details Amount•Amend Tenancy Fee to change tenants mid tenancy £300 plus VAT• to change tenants at end of tenancy £150 plus VAT •Add permitted occupier to existing tenancy £50 plus VAT•Early Vacation contact office for details 1months rent Late Return of Keys at the end of Tenancydaily rent rate•Maintenance Call Out User Error £75 plus VAT•Maintenance Call Out Non emergency out of hours** £150 plus VAT

Affordable tenancies – Feedback so far

1. Any negative responses to offers of an A/R  tenancy?

2. Have tenants queried why the rent is higher?

3. Have tenants queried the fixed term nature of tenancies? 

4. Have there been any post sign up queries about why neighbours (social tenants) pay less rent?

5. Are tenants generally happy with this tenancy type?

6. Has there been any raised expectations from A/R and if so, what have these been?

Affordable tenancies - feedback• Results of NLHT survey

Please tick Yes or No for the following statements that apply:

Yes

No

Were you advised that the tenancy was a 5 year fixed term tenancy before sign up?

Were you advised of the amount of rent payable?

Did the Housing Officer ask if you were in receipt of Housing Benefit?

Are you in receipt of Housing Benefit?

Did the Housing Officer ask if the rent was affordable for you?

Were you given the opportunity to ask questions about the affordable rents?

95.71% 100% 100% 73.90% 95.51% 100%

4.3% 0.0% 0.0% 26.1% 4.5% 0.0%

Policy: What happens at the end of the 5 year fixed term? (1)

• In the vast majority of cases a new fixed term tenancy will be issued.

• Exceptions are: Where it would breach charitable status (e.g where

income is high) Where property under occupied by more than 1

bedroom Where breach of tenancy has been identified

• Rent will be rebased to make sure it is no more than 80% of market rent at that time

Policy: What happens at the end of the 5 year fixed term? (2)

• Tenancy would be formally reviewed at least 6 months before it is due to end. Usually at 4 years 3 months into tenancy

• Aim to assess continued eligibility as outlined above• Report to be made to manager if as a result

recommending termination of tenancy• If decision to end at least 6 months notice of

termination needed and advice and assistance must be given to help tenant find alternative accommodation

• WHG likely to resolve issue of downsizing • Appeal process is established in procedure

Policy: Where is it heading?

• 30/3/12 Minister hints at Affordable Rents repeat

• Montague review• Housing and Growth package stimulus

Affordable Rents – so far

questions or comments