James Teasdale, Head of Venture Development on how our Reimagining Rent programme is accelerating innovative solutions to challenges in the PRS.
Five million households in the UK – 21% of the total – call the private rented sector (PRS) home, with the number set to rise to 5.79m by 2022. While renting works well for many, it’s failing others. A staggering 29% of PRS homes fail the government’s Decent Homes Standard and 17% present a severe threat to health and safety.
The fall in home ownership and scarcity of social housing make the PRS the only option for increasing numbers of people for whom it is often unsuitable, such as the elderly, families and disabled people. For instance, the Assured Shorthold Tenancy (AST), the most common tenancy type in the PRS, allows landlords possession at the end of the term – which can mean eviction without legal recourse after six months. Inevitably, this often creates instability for tenants, and loss of an AST is the single biggest cause of homelessness in the UK. What’s more, renting is no longer a transitional stage – increasing numbers of us expect to rent for most of our lives. The prospect of a future based on 6- or 12-month rental contracts is particularly problematic for vulnerable individuals and families, which collectively could have profound implications for the stability and cohesion of our communities.
The complex challenges presented by the PRS have built up over decades and the changes needed require political focus and energy, and a sea-change in the approach to housebuilding. The scale and complexity of the problem can seem overwhelming to anyone moved to do something about it, but should we just wait until the juddering cogs of increased supply and better regulation alleviate the situation? We don’t think so.
The Young Foundation is taking action now to scale-up innovative models that improve the PRS, particularly for people who are vulnerable and on low incomes. Developed and delivered in partnership with Nationwide Foundation, our Reimagining Rent accelerator supports early-stage ventures with promising solutions by helping them to strengthen their models, demonstrate their social impact and increase their potential to scale, through a free programme of workshops, consultancy and access to experts and funders.
Reimagining Rent’s first cohort supported seven ventures that coalesced around three key shortcomings of the sector: access, market operation and tenant security.
Improving access to the PRS
London First’s Fifty Thousand Homes campaign encourages employers to help employees to obtain their first private rental property, or move between homes. Employers provide assistance through a tenancy deposit loan that works in a similar way to a travel season ticket loan, as large upfront deposits and delays with deposit returns can make life difficult for renters with little savings. The scheme is particularly interesting because it signals a recognition by employers of the challenges their staff face and a sense of responsibility to help, introducing the possibility of more widespread, systemic change.
Homeless Rooms is a Birmingham-based venture that matches empty rooms in supported accommodation to homeless people and sofa surfers who need somewhere to live. They aim to improve the quality of temporary accommodation and level of support for tenants, strengthening routes out of the temporary sector into longer-term, more stable tenancies in the PRS.
Improving how the market operates
One of the deficiencies of the PRS is its lack of transparency and market information. Two Reimagining Rent ventures are tackling this challenge in different but complementary ways.
The founders of Rent Profile were victims of a fake landlord scam, something they later discovered to be a surprisingly widespread problem. This realisation unveiled an opportunity to improve verification and trust in the PRS more generally, which led to the creation of Rent Profile. The platform allows both tenants and landlords to carry out self-background checks and build up rental histories, which reduces the risk of scams and illegal subletting.
Rent Square addresses transparency and information issues particularly in relation to pricing in the sector. Their algorithm allows landlords to set more realistic market rents, reducing void periods and lost rental income and improving affordability for tenants.
Both ventures are also developing improvements to the mainstream tenant credit checking system, whose deficiencies blacklist some people who would make reliable renters and leave them with significantly fewer housing options.
Community Sponsors Homes has developed an idea to address the failure of a complete market segment: wheelchair-accessible rental property. Although there is great demand for rental accommodation among wheelchair users, the fragmented nature of supply means that there is little incentive for individual landlords to adapt properties to make them suitable. This severely limits wheelchair users’ options and has multiple negative impacts on them and their families. By raising an investment fund and adapting rental properties at scale, Community Sponsors Homes hopes to generate a financial return while enabling thousands of wheelchair users to lead happier, more independent and economically productive lives.
The team running Kineara understand that individuals and families can undergo a series of setbacks and changes in circumstances that steadily lead them to the cliff edge of losing their home. Kineara’s 10-week programme of holistic, tailored support has a 92% success rate at preventing the eviction of a tenant once they have fallen into rent arrears.
While landlords can legally evict tenants for rent arrears, in some cases tenants are evicted on grounds that are not legally justifiable. Safer Renting, a programme incubated by London-based charity Cambridge House, provides support to tenants who are driven to the verge of homelessness by bad landlord practice. Their advice and advocacy service is available to the most at-risk households living in the worst properties in the PRS. Safer Renting’s approach is effective at helping tenants to prevent illegal evictions and relocate out of poor conditions into better properties.
Take part in Reimagining Rent
We’re on the lookout for more innovators who are spotting opportunities to improve the private rented sector. Applications are currently open for the second cohort of Reimagining Rent, which will run between September 2018 and February 2019. The closing date for applications is 20 August 2018.
We have been hugely encouraged by the innovative approaches we have supported so far. What other innovations are out there? Who is addressing important challenges in the PRS such as affordability, quality of accommodation and stability? If you are, or you know an initiative that is, apply now or spread the word!
If you have any questions about the programme or our work more generally, please get in touch with our team at email@example.com.