Jenny Pannell Charlotte Cook Independent Consultant Partner PRS – THE MISSING OPTION East region Housing LIN 8 July 2014

The missing option? Expanding private/ market rented housing for older people (and people with disabilities) - especially in specialist housing (age-restricted, &/or with support/care) Charlotte Cook, Partner, Winckworth Sherwood Jenny Pannell, Independent Consultant Introduction

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 Why “The Missing Option”?

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: Overall

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 Demand: Specialist Retirement/Extra Care Housing

Mostly from small buy-to-let landlords, ASTs (insecure 6-month lets); PRS still some poor quality, poor reputation New provision by housing associations and private companies (e.g. Govt Build to Rent): targeted at younger age groups (“young professionals”) and London/SE: Older people are missing Supply: Mainstream PRS Housing

Girlings (2,500 properties, mainly retirement housing) & Places for People (200+ retirement properties managed by Girlings) A few charities and housing associations (extra care/village models) e.g. Abbeyfield Girton Green (E), Belong (NW), Jewish Care (London) and St Monica Trust (SW) Individuals (often ‘reluctant’ landlords - e.g. on inheritance if can’t sell) A few private providers with PRS retirement options Some examples for other needs eg learning disability (partnerships support providers/ private landlords) Supply: Specialist Housing

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

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

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

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

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

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

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

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

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

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

Investor developer or Develop and out Development (3)

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

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 Experience (2)

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 esp. in some areas); – higher HB for specialist market-rent housing though can be 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 Barriers and Overcoming Them: From the Older Person’s Perspective

We have identified issues, barriers, some solutions: Definitions, demand, supply Barriers and overcoming them: – for funders, developers, providers: vires, finance, product and product placement, experience and assumptions – for older people: managing uncertainty: availability, security of tenure, quality of housing and of management Discussion Intro Slide for Ideas

Thank You Charlotte Cook Partner Jenny Pannell Independent Consultant and LIN PRS Briefings co-author Imogen Blood Imogen Blood Associates Solicitors and Parliamentary Agents Minerva House 5 Montague Close London SE1 9BB DX London Bridge 6 T F