Reaching New Rental Markets

Alister Steele, Managing Director,

Castle Rock Edinvar Housing Association

• Introduction to Places for People Scotland

• Market Trends

• Analysis of National Housing Trust Projects

• Case for New Rental Provision

Places for People Scotland Profile • Castle Rock Edinvar subsidiary

formed in 1983

• Involved in market rented sector since 1992

• First ‘Mid Rent’ in 2004

• Rebranded in 2012 as part of Places for People

Long term involvement in rented sector

Rented Housing Portfolio

• Gro-Grant funded developments

• Places for People portfolio management

• Mid market rent under Affordable Housing Policy

• Agent under National Housing Trust

• Transfer from Castle Rock Edinvar

1000 units in management by April 2014

Our Products

• Social Rent, unfurnished, needs based allocations, rent £332 pcm

• MMR, floor coverings, income £12,000 to £36,000 pa, rent £527 pcm

• NHT, floor coverings/white goods, income above £10,000pa, rent £571 pcm

• Market Rent, floor covering/white goods, minimum salary, £550-£725 pcm

Market Trends “Generation Rent”

• Market rented sector is expanding

• Push of young people towards private rented sector – Housing ‘Pathway’

• Government subsidy has shifted to a broader definition of ‘Affordable Housing’

• Home Ownership is still the aspiration

Trends in housing tenure: Scotland

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10.0

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60.0

70.0

% o

f h

ou

seh

old

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Owners

PRS

LA

HA

Tenure Change projections for young people aged 18-30

Source: Labour Force Survey up to 2008: author-developed trend continued to 2020

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15

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30

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40

Per

ce

nt

(tre

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ata)

Owner-ocupier (OO)

Social renter (SRS)

Private renter (PRS)

Parental home (OO)

Parental home (SRS)

Parental home other

National Housing Trust

Interest: • 189 properties developed by

Places for People completing January-June 2013

• Issued 1800 information packs • over 500 applications • Over 100 offers already made

National Housing Trust

Key findings: • Over 80% in private rented sector are staying with

friends or family • 39% are registered on the Edindex common

housing register • The average gross household income is £28,957 • The average age of the head of the household is 36 • 90% are British

National Housing Trust

Previous tenure

Other

Owner/occupier/sharedownership

Renting with a privatelandlord

Staying withfamily/friends

National Housing Trust

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5

10

15

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25

30

35

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20-30 30-40 40-50 50-60 60+

Nu

mb

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Age banding

Age of head of household

National Housing Trust

£0

£5,000

£10,000

£15,000

£20,000

£25,000

£30,000

£35,000

£40,000

£45,000

1 bed 2 bed 2 bed duplex 3 bed

Average household income by property size

Case of New Rental Provision

• New Times New Business “Housing provision in times of austerity”

• Market failures - opportunities • Favourable position of not for profit providers • More commercial approach – mixed economy • Value management of assets

A new generation of housing providers?

Our Positioning: Trusted Landlord

• Established and 20 years experience

• Quality management & repairs • Length of tenancy • Long term commitment to Place

Management

Building on Housing Association strengths

Places for People: Place making Contribution of new rental markets to business strategy

• Mixed income communities • Broadening of customer base • Investment in new supply • Business growth • Improving profitability

New Rental Provision: A New Approach?

• Culture change • Customer service redesign • Financial performance of the

company • Respond to markets • Different ownership/investment

models

New Rental Markets: Unresolved Questions

• Are changes structural or cyclical? • The impact of MMR on private rental market? • Role of PRS in social housing provision? • Will demographic profile change? • Convergence of social rents and mid market

rents?