Affordable Rent Tenancies
Affordable Rent Tenancies Presented by:
Andrew Edwards Guinness Hermitage June 2012
The Affordable Rent Model • Comprehensive Spending Review Oct 10 • A new way of funding investment • Introduces flexible tenancies – new and existing homes • Minimum term 5 y’rs – plus starter • Rents at up to 80% gross market – Including service charges • Rent rebased with each renewal/change of tenancy
Implications for Registered Providers • • • • • •
Fundamental change... New policies and procedures Staff training Differing approaches to tenancy management Complex financial modelling Less secure funding stream
Impact on our customers • • • • •
Insecurity of tenure Financial squeeze Balanced communities Expectations 2 bed house, Fortfield Road, Bristol – Social rent £88.07 – Affordable Rent £124.60
Welfare Reform • Increased demand for downsizing • Pressure to convert smaller homes – less risk • Larger homes must be fully occupied – bedroom tax • Full occupation can breach the benefits cap • Higher rents require greater budgeting skills under the Universal Credit to protect income streams
Challenges – What do You Think ? Questions for Boards and Senior Managers to Consider… • • • • • • • • • •
What’s the criteria for selecting homes to convert? Who will or should the client group be? Will they have different expectations of the service? Will our staff and Boards cope with such radical change? What if our LA partners seek differing approaches? What are the challenges of offering fixed tenancies? How do we manage the service charge conundrum? Will our competitors undercut us? Will we generate enough voids? How would we tackle the hard-to-let homes that are a consequence of higher rents?
Andrew Edwards Guinness Hermitage June 2012
The Affordable Rent Model • Comprehensive Spending Review Oct 10 • A new way of funding investment • Introduces flexible tenancies – new and existing homes • Minimum term 5 y’rs – plus starter • Rents at up to 80% gross market – Including service charges • Rent rebased with each renewal/change of tenancy
Implications for Registered Providers • • • • • •
Fundamental change... New policies and procedures Staff training Differing approaches to tenancy management Complex financial modelling Less secure funding stream
Impact on our customers • • • • •
Insecurity of tenure Financial squeeze Balanced communities Expectations 2 bed house, Fortfield Road, Bristol – Social rent £88.07 – Affordable Rent £124.60
Welfare Reform • Increased demand for downsizing • Pressure to convert smaller homes – less risk • Larger homes must be fully occupied – bedroom tax • Full occupation can breach the benefits cap • Higher rents require greater budgeting skills under the Universal Credit to protect income streams
Challenges – What do You Think ? Questions for Boards and Senior Managers to Consider… • • • • • • • • • •
What’s the criteria for selecting homes to convert? Who will or should the client group be? Will they have different expectations of the service? Will our staff and Boards cope with such radical change? What if our LA partners seek differing approaches? What are the challenges of offering fixed tenancies? How do we manage the service charge conundrum? Will our competitors undercut us? Will we generate enough voids? How would we tackle the hard-to-let homes that are a consequence of higher rents?
