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

2. 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

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

4. 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?

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

6. Ain’t nothing going on but the rent..
Over 2/3 of residents in receipt of Housing Benefit (HB) 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

7. 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

8. Financial impact

9. 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

10. 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%

11. Base Model and Operating Margin

12. Benchmarking Operating Margin

13. Base Model and Operating Cash

14. Base Model and Interest Cover

15. Can we do more ?

16. Financial Impact

17. 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)

18. 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

19. 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?