Jenny Pannell Charlotte Cook Independent Consultant Partner PRS – The missing option Workshop For Housing LIN Conference 18 February 2014 Jenny Pannell Charlotte Cook Independent Consultant Partner

Why “The Missing Option”? Prevailing mindset on tenure, older people and housing is often: 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

Definitions: Market/Private Rent All housing types: houses, flats, bungalows, retirement housing Available to anyone who can afford it No allocation process as for social/ ‘affordable’ rent (i.e. based on assessed housing/ support/ care needs)

Definitions: Specialist Housing Groups of dwellings: small schemes to large retirement villages Age-restricted: 55/ 60/ 65+ Special design features May have support/ care/ facilities available

Definitions: Mainstream Housing No age restriction May have special design features (e.g. Lifetime Homes) Or be property type/ location popular with older people (e.g. bungalows, seaside)

Demand: Overall 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 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 Mostly from small buy-to-let landlords, ASTs (insecure 6-month lets) Still some poor quality New provision by housing associations and private companies (e.g. Govt Build to Rent): targeted at younger age groups (“young professionals”) and London/SE

Supply: Specialist Retirement/Extra Care Housing Girlings (2,500 properties, mainly retirement housing) Places for People (200+ retirement properties managed by Girlings) individuals (often ‘reluctant’ landlords - e.g. on inheritance if can’t sell) a few charities and housing associations (extra care/village models) e.g. Abbeyfield, Belong (NW), Jewish Care and St Monica Trust (SW) a few private providers with PRS options (some inclusive deals e.g. 3 meals a day; not always with tenancies)

Barriers and Overcoming Them Providers (1) Local Authorities Secure tenancies Localism Act 2011 Influence over planners

Providers (2) Housing Associations ASTs Charitable objectives SPV set up

Providers (3) Private Companies Funding structure Long term investment Are they convinced?

Providers (4) Other Charitable Organisations Is PRS charitable? “its all relative”

Finance (1) Need for a successful business model Lots of small scale “buy to let” Broaden horizons?

Finance (2) Buy up existing portfolios Create new ones?

Finance (3) Borrowing capabilities? Sufficient stock? Income risk (nominations, marketing, evidenced demand)

Finance (4) Rent regulation Benefits Macro economy Savings and interest rates

Development (1) Planning policy Nominations CIL Affordable housing % Rent levels

Development (2) Quality of the product Units sizes On site services/facilities

Development (3) Investor developer or Develop and out

Experience (1) Matching the product to the audience Management levels gold silver bronze Management practices

Experience (2) Changing the way we think: ageing population is not a bad thing being a tenant is not a bad thing keeping tenants happy means keeping them in occupation and paying their rent

Barriers and Overcoming Them: From the Older Person’s Perspective Need to manage uncertainty about availability, affordability, quality: now and into the future Availability: suitable PRS housing very limited; 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 Affordability: more likely to be affordable for older people with higher incomes/ significant capital; may be less affordable for those reliant on benefits (LHA issues); higher HB for specialist market-rent housing though problematic (‘exempt accommodation’ issues)

Barriers and Overcoming Them: From the Older Person’s Perspective Security of tenure: 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: 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

Thank You Solicitors and Parliamentary Agents Minerva House Charlotte Cook Partner Jenny Pannell Independent Consultant jennypannell@virginmedia.com 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 SE1 9BB DX 156810 London Bridge 6 T. 020 7593 5000 F. 020 7593 5099 www.wslaw.co.uk