Exploring ideas

Moving towards tenure neutrality

Conference of The Isles 29 November 2013

Pete RedmanManaging Director, Policy and Research

Financial advisors and capital market arrangers for housing clients

We want to increase financial capacity and reduce risk

We want to maximise Social Enterprise Value

Mixed tenure and tenure neutrality can strengthen balance sheets, increase sustainability, and improve social outcomes

Why TradeRisks?

1,000 unbroken years of UK landlord and tenant

Power relationships between commercial, and agricultural landlords, and tenants have moved into balance

But

The status of residential tenants is low, particularly for social housing tenants

1,000 years of UK landlord and tenant culture

There is no conclusive evidence that mixed tenure brings benefits to residents. There is no increase in lending cups of sugar to your neighbour

Most, not all, people dislike large scale social housing estates

Recent work on social mix, and on income mix, does, however, show increases in social capital, and increases in capital values

Does mixed tenure bring benefits?

Where’s the social housing?

Social Rent

Shared ownership

Owner occupied

Small gardens - higher density - hard landscaping - hidden

1. Make all planning policy tenure blind

2. Improve flexibility and recycling of capital subsidies

3. Rebalance Right to Buy

4. Maximise value added across the housing spectrum

Steps towards tenure neutrality

Where’s the social housing?

Right to Buy can distort ideas of worth

Taxpayer, 45%

Landlord; 20%

Social rent tenant; 35%

Distribution of beneficial interest

Current

Administrativerules

Tipped in favourof tenantat expenseof taxpayer

Hard to replacewith remainingreceipt

FutureValue based

Balanced betweeninterests of

taxpayer,landlord, and

tenant

Linked to rentand terms of

tenancy

Maximising value added?????? Type X

Maximising value added?? Type Y

Maximising value added Type Z

A menu of rights and responsibilities distributed between:

• Occupier• Service provider• Equity owner A• Equity owner B…………

Could we have a single tenure?