Housing, the General Election and the Summer Budget SMT Presentation to Board Members Tuesday 15 September 2015

Introduction Picking up the debate – not a standard committee format Asserting Innisfree’s role – owning our future Outcomes sought: Greater awareness of what’s happening Confidence about our financial strength Early direction given to our response

Potential Impact on our Residents How it feels to be me……….

You can find it all in the street Rent reduction of 1% Benefit Cap Reduction Extension of RTB - own my own home Pay to stay Has the life of the lifetime tenancy expired?

Should I stay or should I go now 1 bed flat NW6, rent £133.72 pw Income £60k & 1st baby due Market rent £325 pw – (80%) - £260 per week Should I stay or should I go now…

Ain’t nothing going on but the rent.. Over 2/3 of residents in receipt of Housing Benefit (HB) - 366 tenants Discretionary Housing Payment (DHP) Allocation 2015/16 - £125 million 31 cases affected by bedroom tax 6 cases affected by overall benefit cap More of our tenants will be affected by the revised benefits cap

It’s a numbers game 10% Household Budget Assessments completed 2% declined assessment Over 90% of those interviewed are paid weekly and budget on a weekly basis not monthly 21 referrals to Stepchange, CAB and advice agencies 6 DHP applications

Financial impact

Financial Impact Assumptions used for modelling on base plan Modelling based on 15/16 budget spend Libor at 0.5% in 2015/16 and rising by 0.5% pa to reach max of 5% RPI at 2.5% and CPI at 2% throughout Rent at CPI + 1% after the four years of - 1% Responsive maintenance and major repairs at RPI + 0.5% All other costs and income at RPI We maintain spend on stock investment

Financial Impact Scenarios In addition to the base plan 3 areas of focus for scenario testing Deflation : Rent income at - 1% for 10 years. Costs continue to increase as per base plan Inflation : a) RPI higher than CPI by 1%. Costs raise more sharply than income b) Maintenance increasing RPI + 2% Interest rates higher : Libor raising to 10%

Base Model and Operating Margin

Benchmarking Operating Margin

Base Model and Operating Cash

Base Model and Interest Cover

Can we do more ?

Financial Impact

Impact on our Business plan Take target out of development (3% growth) and instead respond to opportunities Purchase existing tenanted units from other landlords (consortium schemes) Try for mergers (takeovers)

Impact on our Business plan Deliver substantial level of stock investment Invest more in knowledge of our residents Use of Shared Houses – potentially recommending different options Connections with organisations in Ireland Research – in the context of the politics of migration

The Debate What do we need to do differently because of the changes in our external environment? Do you agree with the direction of the suggestions being made? How do you picture Innisfree in 5 years time?