PRS – THE MISSING OPTION
East region Housing LIN
8 July 2014
Jenny Pannell
Independent Consultant
www.wslaw.co.uk
Charlotte Cook
Partner
Introduction
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The missing option?
Expanding private/ market rented housing for
older people (and people with disabilities)
- especially in specialist housing (age-restricted,
&/or with support/care)
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Charlotte Cook, Partner, Winckworth Sherwood
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Jenny Pannell, Independent Consultant
Why “The Missing Option”?
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Prevailing mindset on tenure, older people and
housing is often:
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rental options = social housing
market options = home ownership
+ perhaps some shared equity/ shared ownership
options for ‘in-betweeners’
So the missing option is often private/ market
rent
Demand: Overall
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Under-researched area: often PRS not
mentioned
Some evidence of increasing demand, including
from owner-occupiers
Push factors include divorce/ relationship
breakdown and financial issues
Demand: Specialist Retirement/Extra Care
Housing
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Girlings and 4 extra-care providers report
demand, including from better-off older people
paying higher rents
Demos research found nearly 60% of survey
respondents (aged 60+) “interested” in moving
25% of these were interested in purchase; 25%
interested in renting a retirement apartment on
an assured (lifetime) tenancy
Supply: Mainstream PRS Housing
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Mostly from small buy-to-let landlords, ASTs
(insecure 6-month lets);
PRS still some poor quality, poor reputation
New provision by housing associations and
private companies (e.g. Govt Build to Rent):
targeted at younger age groups (“young
professionals”) and London/SE:
Older people are missing
Supply: Specialist Housing
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Girlings (2,500 properties, mainly retirement housing) &
Places for People (200+ retirement properties managed by
Girlings)
A few charities and housing associations (extra care/village
models) e.g. Abbeyfield Girton Green (E), Belong (NW),
Jewish Care (London) and St Monica Trust (SW)
Individuals (often ‘reluctant’ landlords - e.g. on inheritance
if can’t sell)
A few private providers with PRS retirement options
Some examples for other needs eg learning disability
(partnerships support providers/ private landlords)
Barriers and Overcoming Them
Providers (1)
Local Authorities
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Secure tenancies
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Localism Act 2011
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Influence over planners
Providers (2)
Housing Associations
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ASTs
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Charitable objectives
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SPV set up
Providers (3)
Private Companies
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Funding structure
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Long term investment
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Are they convinced?
Providers (4)
Other Charitable Organisations
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Is PRS charitable?
“its all relative”
Finance (1)
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Need for a successful business model
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Lots of small scale “buy to let”
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Broaden horizons?
Finance (2)
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Buy up existing portfolios
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Create new ones?
Finance (3)
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Borrowing capabilities?
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Sufficient stock?
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Income risk (nominations, marketing, evidenced
demand)
Finance (4)
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Rent regulation
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Benefits
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Macro economy
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Savings and interest rates
Development (1)
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Planning policy
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Nominations
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CIL
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Affordable housing %
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Rent levels
Development (2)
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Quality of the product
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Units sizes
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On site services/facilities
Development (3)
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Investor developer
or
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Develop and out
Experience (1)
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Matching the product to the audience
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Management levels
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gold
silver
bronze
Management practices
Experience (2)
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Changing the way we think:
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ageing population is not a bad thing
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being a tenant is not a bad thing
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keeping tenants happy means keeping them
in occupation and paying their rent
Barriers and Overcoming Them: From the
Older Person’s Perspective
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Need to manage uncertainty about availability,
affordability, quality: now and into the future
Availability:
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suitable PRS housing very limited;
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not on the agenda for most older people, their
family/friends, nor advice agencies or providers
Barriers and Overcoming Them: From the
Older Person’s Perspective
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Affordability:
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more likely to be affordable for older people with
higher incomes/ significant capital;
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may be less affordable for those reliant on benefits
(LHA issues esp. in some areas);
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higher HB for specialist market-rent housing
though can be problematic (‘exempt
accommodation’ issues)
Barriers and Overcoming Them: From the
Older Person’s Perspective
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Security of tenure:
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most older people unlikely to want to move into PRS
without longer or lifetime tenancies
except those using it as short-term gap-filler
Quality of stock and management:
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PRS still suffers from poor reputation
Issues with absentee or constantly changing landlords
need for more high-quality well-managed PRS housing
for older people
Discussion Intro Slide for Ideas
We have identified issues, barriers, some solutions:
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Definitions, demand, supply
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Barriers and overcoming them:
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for funders, developers, providers: vires, finance,
product and product placement, experience and
assumptions
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for older people: managing uncertainty: availability,
security of tenure, quality of housing and of
management
Thank You
Charlotte Cook
Partner
Jenny Pannell
Independent Consultant
[email protected]
and LIN PRS Briefings co-author Imogen Blood
Imogen Blood Associates
www.imogenblood.co.uk
Solicitors and
Parliamentary Agents
Minerva House
5 Montague Close
London
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DX 156810 London Bridge 6
T. 020 7593 5000
F. 020 7593 5099
www.wslaw.co.uk