Reimagining more than just rent

| No responses | Posted by: John Piper | Theme: Places, Reimagining Rent, Social Innovation & Investment

It’s been 20 months since The Young Foundation finalised its proposal for Reimagining Rent, which for many of us feels like yesterday. But did you know that twenty months is also the average length of a tenancy in the UK’s Private Rented Sector (PRS). When compared to an average of 11 years in Germany, this goes some way to highlight how inherently unstable our rental market is.

We knew at the start of this programme that shrinking social housing stock and a growing PRS meant that vulnerable people and those on lower incomes were often living in insecure, unsuitable housing, but we were also aware that before we could take any action we first had to understand the problem.

Whilst it is clear that the housing crisis is complex, requiring action not only from tenants and landlords, but also employers, local authorities and government, some interesting observations have emerged from our work with our latest cohort of housing innovators. Here are some early insights:

Security of Tenure

Every organisation we’ve supported is trying to improve security of tenure.

Many of us recognise that the Assured Shorthold Tenancy does no favours, in particular Section 21 which allows a “no fault eviction”. But it turns out that many other factors can also attribute to poor security of tenure. Below are some examples that our innovative ventures are trying to solve:

  • Your Own Place CIC is providing training to care leavers so they have the best possible understanding of, and chance of sustaining, a PRS tenancy.
  • Smarter Renter is providing tenants and landlords with easily accessible information helping them enter a tenancy with realistic expectations of what is required from each party.
  • The Kohab is providing intergenerational accommodation on the premise of long leases and affordable set rental increases.
  • Rent Square and Rent profile are both making referencing fairer by using innovative methods which give those in receipt of housing benefit or with previous bad history a fair chance of passing referencing based on their current circumstances.
  • Kineara intervene when tenants are facing eviction. They assess the situation holistically, provide support where required and open up communication between the tenant and landlord. They have a 92% success rate in sustaining failing tenancies.

Intermediary organisations

At The Young Foundation we appreciate that although vulnerable tenants tend to feel the effects of the housing crisis most harshly, landlords are also feeling short-changed, and both groups often fail to see eye to eye with one another.

When you strip this back, it’s clear that these relationships should really be strengthened. The majority of tenants want a safe and secure place to live, and the majority of landlords want an easy life and a steady return on their investment.

Part of the solution lies with intermediary organisations such as letting agencies and referencing companies, which is an area fertile for disruptive innovation, something which we focus on closely through our work on this programme.  Some of the most disruptive innovation within the commercial sector in recent years has been achieved through disrupting entrenched intermediary organisations, whether that’s been in tourist accommodation, finance, travel or retail.

The current business model of most housing intermediaries rely on The current structure of these businesses, however, mean it’s more profitable to have regular rent increases  and a higher turnover of tenants leading to a greater number of “tenant finder” fees.

I’m not suggesting that intermediary organisations shouldn’t exist, or don’t add value. The service they provide is absolutely essential, and much like the tenants and landlords they serve, the people working for them need a steady income and a secure place to live too.

Indeed, every Reimagining Rent venture is a kind of intermediary between tenants and landlords, the only real difference being one of the primary goals of our ventures, which is to improve tenant / landlord relationships. This is not necessarily done at the expense of profit either, with many of our latest cohort being companies limited by shares.

So what’s the solution?

A stronger surge of innovation that challenges some of the dominant business models for intermediary organisations is highly desirable.

And from a regulatory perspective, looking across the border at the Scottish Government’s new Private Residential Tenancy would be a very positive step forward. Their approach provides far greater security and certainty to tenants by removing “no fault evictions” and fixed term tenancies, effectively making tenancies open ended. At the same time, they have also made the eviction process clearer and more effective by reforming the court system and giving simple guidelines for tenants and landlords to understand.

In addition, there’s room to reform the code of conduct of letting agents in a way that better suits everyone involved.

However, the ability for all actors across the housing system to share experiences, perspectives and challenges- is the most important step towards real change. As with most challenges in the PRS, productive solutions will only be created by working together, understanding how different actors within the system can flex and innovate to create a system that works better for everyone – both landlords, intermediaries and tenants.

On 24 April 2019, The Young Foundation will be hosting a collaborative, solutions-focused workshop, with key influential people from all areas of housing coming together to find workable solutions to known problems, bringing in the voices of tenants, developers, social innovators, regulators, landlords and government ensuring no one group of people is left out of the discussion. Register your interest in attending here.

The event is by invitation only, but if you would like to attend – or are a letting agent or referencing company and would like to talk about your experiences, please do get in touch at john.piper@youngfoundation.org.

John Piper Programme Manager, Reimagining Rent

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