Communities and Local Government CommitteeWritten evidence submitted by Places for People
1.0 Introduction
1.1 Places for People is one of the largest property management, development and regeneration companies in the UK. We own and manage around 84,000 homes, including around 23,000 homes for private rent, and have assets in excess of £3 billion.
1.2 Our vision is to provide aspirational homes and inspirational places and our approach looks at all aspects of communities rather than focusing solely on the bricks and mortar provision of homes. Places for People’s innovative approach to place management and placemaking allows us to regenerate existing places, create new ones and focus on long-term management.
1.3 We welcome the opportunity to respond to the Select Committee Inquiry on the private rented sector, which is playing an increasingly crucial role in the UK economy.
1.4 Places for People is a member of the British Property Federation (BPF) and we endorse their response to this Inquiry. Our own response adds further thoughts and observations in relation to the issues raised, based on our long track record and wide-ranging experience of the private rented sector.
2.0 General Comments
2.1 Private rented housing plays an increasingly important role in UK society and the sector is rapidly expanding to meet a growing demand from those unable to access homeownership, as well as those unable to access or qualify for social housing.
2.2 Places for People is a member of the British Property Federation (BPF) and we endorse the BPF’s response to this Inquiry. Our comments below focus on those areas which we wish to highlight and which we are best placed to comment on.
2.3 In November 2012, Touchstone joined the Places for People Group. Touchstone is a leading property management company with more than 20 years’ experience in residential investment and portfolio management. This response draws on the knowledge and experience in the private rented sector (PRS) of both Touchstone and Places for People.
3.0 Response to the Issues Covered by the Committee
The quality of private rented housing, and steps that can be taken to ensure that all housing in the sector is of an acceptable standard
3.1 Large-scale professional landlords/property managers such as Places for People/Touchstone uphold high standards in their stock and have maintenance and asset management programmes in place to protect their investment and keep homes in good condition.
3.2 Initiatives such as the Government’s Green Deal may see a gradual improvement in the condition of existing market rented homes, as well as the increasing focus on new-build properties and purpose-built Build to Rent stock by the professional sector. Support for professional and institutional investment will further boost the amount of properties meeting higher standards.
3.3 Quality in the sector has also been improving as a result of a shift in tenant profiles and requirements. Tenants are demanding better quality and are prepared to pay for it. Quality is therefore not a problem if the tenant has real choice; however at the lower end of the private rented sector market, where tenants are on low incomes and/or benefit-dependent, choice is often limited. Boosting institutional investment will have some effect on this market as overall standards are raised, but assistance could be offered to landlords to improve stock in order to tackle residual quality issues at the “bottom end” of the market which can have a damaging effect on communities.
Levels of rent within the private rented sector—including the possibility of rent control and the interaction between housing benefit and rents
3.4 We share the BPF’s concerns on the negative impact that any form of rent control could have on future investment into the private rented sector, and believe that—away from sensational headlines—rental growth is not occurring at levels above general price increases. Landlords balance achievable rent levels with tenant conduct, tenant loyalty and cost of finding a new tenant.
3.5 The real issue is supply: with a sustainable housing supply in a range of tenures, rents will find an appropriate level and this is a far more sustainable answer to the affordability problem.
Regulation of landlords, and steps that can be taken to deal with rogue landlords
3.6 Existing schemes such as Safe Agent—which focuses on the importance of client money protection and which Touchstone is a founder member of—already help to protect consumers against rogue landlords, but more needs to be done. Government needs to improve consumer awareness of their rights through better promotion of those rights, and any firmer control has to be accompanied by redress which has real “teeth”.
3.7 Places for People has a competitive advantage in the sector in terms of quality standards and our marketing is now increasingly focused on our reputation for quality and trustworthy property management. The way the UK private rented sector is structured overall, however, often makes it difficult for tenants to know who their landlord is and how they will behave, as a large amount of lettings happen via local agents.
3.8 Providing a good service to tenants costs good landlords money, and we would support a more robust framework to tackle rogue landlords and truly address bad practice.
Regulation of letting agents, including agents’ fees and charges
3.9 We would support—and already demonstrate in the extensive network of 500 independent letting agents we manage—transparency on fees. Touchstone provides this transparency by listing all the fees that could be payable by a tenant in its documentation—both as part of the tenancy sign-up and during their tenancy.
3.10 Landlords have a responsibility to use only accredited and reputable agents, but this is difficult when most landlords own only one or a handful of properties. Introducing more transparency for letting agents will help improve standards overall and give tenants more confidence in knowing what their fees are used for.
The regulation of houses in multiple occupation (HMOs), including the operation of discretionary licensing schemes imposed by a local authority for a category of HMO in its area
3.11 We would support any initiative that could be proven to be effective in reducing safety concerns and mismanagement by rogue landlords and agents. However, we believe these outcomes are not yet forthcoming, whilst HMO regulation is proving a cost and admin burden to many landlords and agents who are already compliant.
Tenancy agreements and length and security of tenure
3.12 We believe that—with the exception of a need to sell a property—most landlords would be happy to see tenancy lengths increasing, as long as the rent remained at the correct market level and the tenant observed their obligations. Our experience is that it is rare for a tenancy to be forcibly ended by a landlord for any reason other than the need to sell the property, tenant arrears or breach of the tenancy conditions. We are aware of the demands from some groups for longer fixed periods for tenancies, and believe this would on balance be seen as a steadying factor for those considering larger and more long-term investment into the sector. However, we are keen that this longer “contract” is seen as just that by both sides, with tenants not able to demand a longer fixed period whilst retaining the ability to give one month’s notice to vacate.
3.13 We would also add that it is often the tenant who in fact requires a shorter agreement than the customary minimum of six months. Places for People offers fixed tenancies for up to three years on all our properties for tenants that pass referencing; however this would be more difficult to manage at the lower end of the market where there are perhaps more risks for the landlord.
How local authorities are discharging their homelessness duty by being able to place homeless households in private sector housing
3.14 Local authorities face a real challenge in having to coordinate a sector that is hugely fragmented in terms of geography, quality and ownership. We believe that the PRS can offer an effective housing solution for households facing homelessness, but appropriate safeguards and support need to be in place to make sure the accommodation is suitable and the tenant can sustain their tenancy.
January 2013
APPENDIX 1
ABOUT PLACES FOR PEOPLE
Places for People is one of the largest property development and management companies in the UK, with around 84,000 homes either owned or managed in a mixture of different tenures. With over 8,000 employees, it is a unique organisation that provides a diverse range of products and services to build quality, safe and sustainable communities.
Places for People regards itself as a housing and regeneration organisation that puts people first. We provide solutions that not only cover a range of different housing tenures but also offer a range of support services including leisure facilities, elderly care and financial services—all the things that contribute to making successful places prosperous, popular and truly sustainable.
Places for People currently owns and manages around 41,000 affordable rented properties, around 23,000 properties available for market rent and over 10,000 properties where we retain a freehold stake as part of either shared ownership or “right to buy” arrangements in a number of developments throughout the UK. We also own and manage around 6,000 homes for older and vulnerable people, as well as 98 leisure centres for local authorities. Our portfolio is designed to “ensure successful places” and covers the following broad mix of products:
Places for People Neighbourhoods—investment, regeneration and place making.
Places for People Homes—neighbourhood and property management.
Places for People Individual Support—support for independent living.
Places for People Property Services—in-house maintenance services.
Places for People Development—master planning and building new developments.
Places for People Financial Services—financial products for customers.
Cotman HA—managing around 3,000 homes across East Anglia.
Emblem Homes and Blueroom Properties—homes for sale and rent.
Touchstone—residential investment and property management.
DC Leisure—managing leisure facilities/swimming pools for local authorities.
We want all our neighbourhoods to be places where people are proud to live. To do this, our developments need a mix of homes, easy access to shops, schools, healthcare and leisure activities, safe public spaces, good transport links and job opportunities.
When we create new places for people to live we plan a mix of tenures and house types designed for communities that have people from different social backgrounds. All of our homes whether for sale or for rent are designed and built to the same high standards with the same specification, making different tenures indistinguishable.