Going private to ease homes crisis
19/06/2008
Housing and homelessness are rising to the top of national and local agendas with local authorities facing a unique range of difficult issues to grapple with for the foreseeable future. Four years and counting! a conference tracking Scotland’s progress towards the 2012 homelessness target is being hosted by Shelter Scotland in Glasgow on Monday 23rd June with Stewart Maxwell MSP, Minister for Communities as the principal speaker.
The current housing market situation – slowing property prices and the ‘credit crunch’ – will likely result in fewer new home completions (both public and private sector), more repossessions, increasing housing waiting lists, more demand on the private rented sector and the likelihood of increasing numbers of homeless presentations to local authorities.
A statement is expected this month from the Scottish Government on the overall ways forward following last winter’s Firm Foundations Consultation. The consultation evoked 387 responses from organisations and individuals. The majority of respondents welcomed some expansion of the role of the private rented sector in meeting housing and homeless need.
Orchard & Shipman plc was specifically mentioned in Firm Foundations for their private sector leasing (PSL) scheme with City Edinburgh Council. PSL schemes deliver a number of important benefits to local authorities: major increase in temporary accommodation provision; significant budget savings when compared with the use of Bed & Breakfast accommodation; partnership working with landlords; and risk sharing with the private sector providing guarantees on rent collection and property condition
Four PSL schemes operated by Orchard & Shipman in Scotland currently exist – City of Edinburgh (for 1,500 properties – in existence since 2005) and three contracts awarded last year – East Lothian, Midlothian and Scottish Borders. The company is in various stages of talks with 17 other local authorities in Scotland and it is likely that further contracts will be awarded this year.
Private landlords report high levels of satisfaction with PSL and are attracted by guaranteed rent for up to 5 years with no void periods, property returned in good condition and a full professional tenancy management service. Even in the current market, Orchard & Shipman are holding well-attended Landlord Information Evenings and receiving a large number of enquiries from landlords wishing to join the scheme.
The tenant client group are individuals and families who have made homeless presentations to their local authority for reasons such as relationship breakdown, loss of employment, no longer being able to remain at previous home, fleeing domestic violence, etc and each is given a self-contained house or flat. Properties are usually let on Short Scottish Secure Tenancies (SSSTs) for a minimum of 6 months, providing tenants with an opportunity to regroup following perhaps a period of some crisis in their lives.
Tenants are often able to exercise some choice in selecting their accommodation with the PSL schemes offering a range of locations and house types. For example, in Edinburgh properties have been obtained in 57 out of the city’s (pre 2007) 58 electoral wards. This often enables tenants to remain close to schools, employment and family support networks. Allied to a supportive housing management service, these factors help account for a tenancy failure rate that is below 2%.
The Scottish Government’s Housing Aspirations Study in 2007 indicated that location, neighbourhood and property type were more frequently mentioned than tenure type as priorities. The Government will shortly consult on amending the Homeless Persons Interim Accommodation (Scotland) Regulations 2002 which could see people being given the right to a ‘settled’ home which could potentially include a private rented sector tenancy.
As evidence of their commitment to providing quality property and tenancy management standards, Orchard & Shipman sponsored a recent Chartered Institute of Housing in Scotland Action Plan which set out the case for legal standards for all temporary accommodation to protect the safety and security of tenants.
What further action is needed by local authorities? Currently just 8% of temporary accommodation in Scotland is sourced from the private rented sector, compared with 68% in England. There is now a growing acceptance of the need to expand the role of the private sector, especially in delivering high quality Private Sector Leasing schemes.
Substantial cost savings for authorities, improvements in outcomes for their clients and assistance with meeting Government targets combine to create the ideal conditions for Private Sector Leasing to occupy a more significant role in Scotland in the coming years.
Article from Andrew Morrison, Director of Policy & Business Development,
Orchard & Shipman plc