Renters' Rights Bill

Written evidence submitted by Associated Retirement Community Operators (ARCO) to The Renters’ Rights Public Bill Committee (RRB93).

EXECUTIVE SUMMARY

1. ARCO members operate modern housing-with-care schemes for older people, known as Integrated Retirement Communities.

2. ARCO and its members support the Renters Rights Bill.

3. However, the sector is concerned that the tribunal system will in future compare ‘apples with oranges’ when evaluating market rent for Integrated Retirement Communities.

4. ARCO is seeking a Written Ministerial Statement setting out that the tribunal system should have recourse to specific, relevant data when evaluating ‘market rent’ for Integrated Retirement Communities.

5. ARCO is also concerned to protect the option of ‘rent-to-buy’ for older homeowners seeking to buy a home in an Integrated Retirement Community.

6. ARCO therefore proposes that the protection of rent-to-buy in social housing (Ground 1B) in the Renters Rights Bill is extended to Integrated Retirement Communities.

INTRODUCTION

7. Modern housing-with-care schemes for older people are known as Integrated Retirement Communities. The average age of residents is 80+. Homes are available for social rent, affordable rent, private ownership and private rent.

8. Integrated Retirement Communities are different from both Retirement Housing and Care Homes, and are distinguished by the range of features and amenities:

a. every resident has their own front door, kitchen and bathroom

b. 24/7 onsite support so there is always help available if required

c. extensive shared facilities – including meals available in restaurants or dining area, and an active social programme

d. lounges, gyms, hairdressers, shops and other leisure offers

e. optional, CQC-regulated, onsite care and support services designed to support older people to live independently for as long as possible.

9. Multiple ARCO members offer private rent – including charities, not-for-profit and private companies:

· Anchor

· Augustinian Care

· Auriens Group

· Belong Villages

· Jewish Care

· Bridge House of Twyford

· Newlands of Stow

· Inspired Villages

· MHA

· Retirement Villages Group

· Richmond Villages (Bupa)

· St Monica Trust

· Untold Living

10. ARCO and its members support the Renters Rights Bill, but it presents two areas of concern:

a. the operation of tribunals in relation to rent challenges and whether they will in future compare ‘apples with oranges’

b. preserving the option for older people of ‘rent to buy’ when considering a move to a ‘for sale’ Integrated Retirement Community.

OPERATION OF THE TRIBUNAL SYSTEM FOR CHALLENGES TO RENTS

11. The rent review tribunal system is wholly untested in relation to Integrated Retirement Communities. Rent review tribunals have no experience of estimating market rent for Integrated Retirement Communities nor recourse to relevant data.

12. ARCO is therefore concerned that tribunals will – inappropriately – compare rent in Integrated Retirement Communities to rent in general needs (mainstream) housing. In short, they risk comparing ‘apples with oranges’.

13. There are two aspects to this risk. First, as a services-led model of housing incorporating wide-ranging and comprehensive services and facilities, rent in an Integrated Retirement Community is typically higher than for mainstream housing (e.g. provision of 24/7 on-site support in a scheme costs around £200,000 per year). It is also higher than rent in a basic retirement housing scheme with limited facilities.

14. Second, rent paid in an Integrated Retirement Community may also subsidise the cost of providing services such as meals provision and domiciliary care as part of an inclusive rent – i.e. ‘input’ factors determining the rent may be wholly divorced from changes in local average rents in general needs housing.

15. These risks are exacerbated by the fact that the Integrated Retirement Community rental market is small and geographically spread, so there may not be another scheme offering private rent in the local area.

Our Request: Written Ministerial Statement on rent review tribunals

16. The Minister for Housing has said "There is a shared understanding between the sector and the Government that ensuring that the Courts and Tribunals Service is prepared for the implementation of the new tenancy regime is essential." (Renters’ Rights Bill Committee, 22/10/2024).

17. ARCO and its members are therefore seeking a Written Ministerial Statement as soon as possible that the tribunal system should have recourse to specific, relevant data when evaluating ‘market rent’ for Integrated Retirement Communities, in order to ensure that the comparator is not general needs housing (or lower-service retirement/sheltered housing), but other private rented units in Integrated Retirement Communities.

18. We believe this direction from government will:

a. clarify the government’s intentions

b. guide the work of the tribunal system

c. reassure operators of Integrated Retirement Community sector – including those intending to build more homes for rent for older people in future.

PRESERVING THE OPTION FOR OLDER PEOPLE TO ‘RENT-TO-BUY’

19. Some Integrated Retirement Communities offer a rent-to-buy (or ‘try before you buy’) contract. Typically, the customer proceeds to buy the property and the tenancy ends by consent once the purchase completes. This option is also useful for older people who want to move quickly into a ‘for sale’ Integrated Retirement Community for care and support reasons, but are still awaiting the sale of their home.

20. Currently, an AST can be used for rent-to-buy, but this will be prevented by the Bill

21. In order to maintain rent-to-buy as an option for older people, operators will need to be able to bring a tenancy to an end before 12 months and have the option to re-let a unit (for example, if someone chooses to more back to general needs housing, but another older person wishes to try ‘rent-to-buy’ in a unit that has become available).

22. However, under the Bill, the operator will be able to gain possession to sell the property under new ground 1A (sale of dwelling-house), but not during the first 12 months of the tenancy, which is longer than the typical rent-to-buy period. In addition, the property cannot be re-let to another customer after possession has been obtained.

Our Request: Extend the rent-to-buy protection for social housing to Integrated Retirement Communities:

23. Rent-to-buy in social housing is protected by Ground 1B in the Renters Rights Bill. ARCO therefore proposes that Ground 1B is extended to rent-to-buy in Integrated Retirement Communities (or a new equivalent ground for possession following an IRC rent to buy agreement be created).

24. Our proposal: Amendment of New ground for possession after rent-to-buy agreement:

Schedule 1, paragraph 4, page 157, line 17, at end insert :"and either:

Schedule 1, paragraph 4, page 157, line 22, at end insert: "and"

Schedule 1, paragraph 4, page 157, line 28, at end insert:

"or

(g) the landlord who is seeking possession is a provider of age-restricted accommodation to occupiers aged 55 years and above;

(h) the assured tenancy was entered into pursuant to a rent-to-buy agreement;

(i) the period stated in that agreement has expired; and

(j) the landlord who is seeking possession has complied with –

(i) any provision of the rent-to-buy agreement requiring the landlord to offer the dwelling-house for sale to the tenant, and

(ii) any requirements in the agreement about such an offer."

Schedule 1, paragraph 4, page 157, line 29, delete "this ground" and insert "sub-paragraph (f), above"

November 2024