Perrons Davis Housing benefit tenants in the private rented sector

Private rented sector: it’s the future Steve Perrons Managing director

Our business  Scale  Hull, Grimsby, Doncaster, Nottingham  400 approx properties rented to benefit tenants, 87 landlords  Model works in postcodes of high structural deprivation, ie. HU3  High unemployment, low incomes  90% terraced housing  average house price of about £70,000, more than £100,000 below the national average and well under the HU postcode area average

Our tenants  Young single people living alone or with a friend  Young single mums, fewer 2.4 families  Older unemployed and/or divorcees  High incidence of social problems: alcohol, drugs, history of crime, etc Why they come to us....  No deposit required  DSS welcome  Help with local authority forms  Good standard of accommodation

Our landlords  High-income professionals  Retired people  “Spreadsheet investors”, ie. Disillusioned savers seeking high returns –Yield for landlords, gross = min. 10% net = min 8%  Hands-off, not from the local area  Long-term

How it works  Affordability  Guarantors. 95% of prospective tenants can provide a guarantor  Intensive management - monthly inspections, etc. –2 to 3% of tenants fall behind with their rent –1% void rate –£750 = typical annual maintenance spend on a terraced house  Higher than average lettings fees to landlords  Work with local authorities informally

Problems/ barriers to growth  Stigma associated with housing benefit tenants  Not enough contact with local authorities - don't all have the same system ie. easier in Hull than in Nottingham  Reliance upon guarantors

 Shared room rate up to age 35 will have significant impact  Cap has no impact in our areas  50 th to 30 th percentile has small effect on revenue  Plan to offer direct payment for rent reductions unrealistic Effects of cuts to housing benefit