In the second part of the interview with Chris Hancock, Head of Housing at Crisis (see part 1 here), we continue to explore tenancy lengths, ensuring that management and solid lines of communication are in place, mortgage borrowing on properties specifically let to LHA tenants / ex-homeless, the noteworthy political will to eradicate rough sleeping (particularly in London), what the UK can learn from other global models and initiatives. Scroll down to the bottom of this post, for information about up and coming events in London, Scotland and Wales which will certainly be of interest to landlords interested in this area.
PIB: This may be a difficult question to answer – as you may find that there´s a trade-off between longer, secure tenancies with landlords perhaps being wary about extended commitments and other unknowns – but what kind of tenancy lengths are the norm?
CH: We originally thought that security of tenure was very important – in some cases however, members preferred the more flexible options offered through shared housing. For example, if they have found gainful employment, there would not usually be any significant transitional issues with shorter tenancies. Nonetheless, in most cases, we usually aim to get the longest possible tenancy. We would usually start by asking landlords about the nature of their business. For example, it´s important to know if they are in it for the long haul or if they may want move back in six or twelve months’ time, for example. We can then find the right type of tenant mix for that particular property. We are tending to find that landlords are keen to look at an initial twelve-month period, perhaps with some kind of break clause, to see how well things progress. So if the tenant is paying on time, the property is kept well and things are generally moving in the right direction, the tenancy can then be extended.
PIB: That sounds logical – I guess it comes down to ensuring that the management processes and lines of communication are firmly in place so that both the tenant and the landlord can build a healthy relationship that will hopefully last into the medium-long term…
CH: Yes, absolutely, we’ve seen a good level of growth of such longer tenancies as members appreciate the benefits of having a fixed place to live for their own well-being. Landlords in such circumstances are also happy knowing that, whilst they could potentially make more money letting privately in the short term, longer periods of rental income will provide them with a greater level of certainty. To incentivise the market, we have also been promoting rental guarantees which provides landlords with that extra peace of mind.
PIB: With regards to mortgage-purchased properties, it would seem that lenders are still reluctant to underwrite loans where the end service user is a LHA tenant – do you see this changing in the foreseeable future?
CH: Mortgage lenders previously had a terrible averseness to tenants on housing benefit which fortunately is not as prevalent today. Some lenders actually take issue with longer tenancies and insurance providers may also have specific stipulations – but I believe things are generally improving. We’re pushing the concept of landlords working with the homeless alongside the National Landlords Association (NLA) and the Residential Landlords Association (RLA). We feel it is important that government realises the importance of reintroducing the link back to the market. Bringing more landlords into this space will only be possible when there are genuinely feasible and realistic opportunities. Whilst of course there is a need to appreciate the range of commercial risks, placing unwarranted restrictions on the sustainable growth of this market segment will merely hinder the achievement of the goals we´re all trying to achieve.
PIB: Interestingly, the government appears to be taking more of a proactive role in terms of confronting the issue of homelessness. In the Capital, for example, the Greater London Authority (GLA) has announced a £50 million homelessness fund. Do you know how that money is going to be deployed?
CH: By all accounts, there is going to be a mixture of focuses. Rightly, the GLA will always be looking at ways to support people who have been on the streets the longest – so funding these kinds of support packages will be a priority. For example, outreach teams will continue to go out and find people on the street, engage with them with the overarching aim of finding appropriate solutions specific to each individual. Providing immediate access to emergency accommodation for those who are sleeping rough is likely to be a key area of spending – a service that has suffered significantly in recent years.
Crisis would like to see the GLA actively taking a role in working with landlords, exploring new and innovative ways to bring industry stakeholders together. There are 33 different London Boroughs and a number of organisations all actively looking to work with landlords. However, whilst some are better than others, it is often difficult to find clarity and the lack of homogeneity across the whole social lettings process often means that it is really difficult to find the right people to talk to. We would like to see a single point of contact for London landlords, a model that could eventually be replicated across the country. We are also calling for a national deposit scheme whereby local authorities would underwrite the rent deposits of homeless people to help them get into the private renting sector.
PIB: Interesting. Yes, I personally think that many landlords would be willing to sacrifice a lower overall return if there was an adequate support structure and, as you mentioned, longer tenancies and other linked guarantees in place.
CH: Our model aims to achieve just that, de-risking the lettings process by means of effective management throughout the length of the tenancy. The social lettings agency model is not profit-driven which means that there are no hidden agendas or commercial motives to drive high levels of tenant churn (and therefore higher revenues from fees). We recently conducted a survey with the Royal Institute of Chartered Surveyors (RICS) and some 52% of landlords who responded said that they would be willing to let to the ex-homeless if they knew more about the support services and the national deposit scheme (aimed at helping members with their bond requirements).
PIB: It´s also interesting to see a range of global models making notable progress including the Housing First in Finland[1] and Breaking Ground in the US[2]. Closer to home, there is also Evolve Housing[3] and a recently announced Land Aid initiative[4], where the aim is to provide more than just a place to sleep and include “wraparound” services serving to help people overcome the various challenges they may be facing and move forward.
CH: Yes, absolutely – homelessness has such a broad definition and can be triggered by something unexpected as a relationship breakdown or a loss of job. Many people just need a helping hand getting back on their feet so moving them into to private tenancy with some life support as all that is needed to get them reintegrated back into society.
PIB: Could you tell us a bit more about the event that Crisis are hosting around the country in April that landlords may well be interested in coming along to?
CH: Sure – on 20th April, in line with our fiftieth anniversary, the national policy conference for England will set out a consultation exercise aimed at setting out our goal for Crisis to no longer exist in 50 years´ time. Keynote speakers include Communities and Local Government secretary, Sajid Javid MP and Dr. Sam Tsemberis, the founder of Housing First. We´re very interested in hearing landlords perspectives as very much being part of the solution, so if any of your readers would like to come along, tickets are available on our website. We´re also running events in Scotland and Wales. Also for people who are interested we’ve got a number of best practice guides and toolkits via our resources page. Even if we don’t operate in a specific area, we’ll usually have partner organisation who are doing similar things that we can put people in contact with. Please also feel free to e-mail at private.renting@crisis.org.uk.
PIB: This is all very refreshing to hear – particularly as landlords have borne the brunt of a lot of negative press in recent years. Creating an open dialogue with the third sector and widening the ability to collaborate is something that should certainly be embraced, especially as the issue of homelessness appears to be worsening every year.
CH: Yes, we´re certainly not a landlord bashing organisation and we want to work constructively with the sector. We´re seeing that so many landlords are driven to make a difference. Obviously the numbers have to stack up – but when they do, you’ve got reliable income coming in and tenants who want make the place a home. Overall, it can work really well.
[1] An idea currently being considered in the UK by communities secretary Sajid Javid, rather than moving homeless individuals through different housing levels, Housing First moves the homeless individual or household immediately from the streets or homeless shelters into permanent housing (and not temporary accommodation in hostels or emergency shelters). The model has been successfully implemented in Finland since 2008 which today provides 16,300 low cost flats to the ex-homeless.
[2] Founded in 1990, this not-for-profit organisation based in New York City provides good quality permanent and transitional housing for the homeless. Breaking Ground has created over 5,000 units today under the philosophy that supportive housing costs considerably less than homeless shelters – and many times less than costs of incarceration or hospital rooms.
[3] A London-based homelessness charity working with over 1,500 people each year through accommodation, support and ongoing advice.
[4] In March 2017, the property industry charity first major capital appeal to raise £1.5m to create a state-of-the-art building near Old Street in London to provide 146 beds for young people at risk of homelessness. Opening in Autumn 2018, LandAid House will offer a safe place to live as well as advice on housing, education, training and well-being, a two-year Move-On programme designed to develop the skills needed to live independently, and dedicated project workers to offer 1-2-1 guidance and support.
