The Missing Option: Exploring the Demand and Supply of Private Rental Housing for Older People

1. PRS – The missing optionWorkshop For Housing LIN Conference18 February 2014 Jenny Pannell Charlotte Cook Independent Consultant Partner

2. Why “The Missing Option”? • Prevailing mindset on tenure, older people and housing is often: • rental options = social housing • market options = home ownership • + perhaps some shared equity/ shared ownership options for ‘in-betweeners’ • So the missing option is often private/ market rent

3. Definitions: Market/Private Rent • All housing types: houses, flats, bungalows, retirement housing • Available to anyone who can afford it • No allocation process as for social/ ‘affordable’ rent (i.e. based on assessed housing/ support/ care needs)

4. Definitions: Specialist Housing • Groups of dwellings: small schemes to large retirement villages • Age-restricted: 55/ 60/ 65+ • Special design features • May have support/ care/ facilities available

5. Definitions: Mainstream Housing • No age restriction • May have special design features (e.g. Lifetime Homes) • Or be property type/ location popular with older people (e.g. bungalows, seaside)

6. Demand: Overall • Under-researched area: often PRS not mentioned • Some evidence of increasing demand, including from owner-occupiers • Push factors include divorce/ relationship breakdown and financial issues

7. Demand: Specialist Retirement/Extra Care Housing • Girlings and 4 extra-care providers report demand, including from better-off older people paying higher rents • Demos research found nearly 60% of survey respondents (aged 60+) interested in moving • 25% of these were interested in purchase; 25% interested in renting a retirement apartment on an assured (lifetime) tenancy

8. Supply: Mainstream PRS Housing • Mostly from small buy-to-let landlords, ASTs (insecure 6-month lets) • Still some poor quality • New provision by housing associations and private companies (e.g. Govt Build to Rent): targeted at younger age groups (“young professionals”) and London/SE

9. Supply: Specialist Retirement/Extra Care Housing • Girlings (2,500 properties, mainly retirement housing) • Places for People (200+ retirement properties managed by Girlings) • individuals (often ‘reluctant’ landlords - e.g. on inheritance if can’t sell) • a few charities and housing associations (extra care/village models) e.g. Abbeyfield, Belong (NW), Jewish Care and St Monica Trust (SW) • a few private providers with PRS options (some inclusive deals e.g. 3 meals a day; not always with tenancies)

10. Barriers and Overcoming ThemProviders (1) Local Authorities • Secure tenancies • Localism Act 2011 • Influence over planners

11. Providers (2) Housing Associations • ASTs • Charitable objectives • SPV set up

12. Providers (3) Private Companies • Funding structure • Long term investment • Are they convinced?

13. Providers (4) Other Charitable Organisations • Is PRS charitable? “its all relative”

14. Finance (1) • Need for a successful business model • Lots of small scale “buy to let” • Broaden horizons?

15. Finance (2) • Buy up existing portfolios • Create new ones?

16. Finance (3) • Borrowing capabilities? • Sufficient stock? • Income risk (nominations, marketing, evidenced demand)

17. Finance (4) • Rent regulation • Benefits • Macro economy • Savings and interest rates

18. Development (1) • Planning policy • Nominations • CIL • Affordable housing % • Rent levels

19. Development (2) • Quality of the product • Units sizes • On site services/facilities

20. Development (3) • Investor developer or • Develop and out

21. Experience (1) • Matching the product to the audience • Management levels • gold • silver • bronze • Management practices

22. Experience (2) • Changing the way we think: • ageing population is not a bad thing • being a tenant is not a bad thing • keeping tenants happy means keeping them in occupation and paying their rent

23. Barriers and Overcoming Them: From the Older Person’s Perspective • Need to manage uncertainty about availability, affordability, quality: now and into the future • Availability: • suitable PRS housing very limited; • not on the agenda for most older people, their family/friends, nor advice agencies or providers

24. Barriers and Overcoming Them: From the Older Person’s Perspective • Affordability: • more likely to be affordable for older people with higher incomes/ significant capital; • may be less affordable for those reliant on benefits (LHA issues); • higher HB for specialist market-rent housing though problematic (‘exempt accommodation’ issues)

25. Barriers and Overcoming Them: From the Older Person’s Perspective • Security of tenure: • most older people unlikely to want to move into PRS without longer or lifetime tenancies • except those using it as short-term gap-filler • Quality of stock and management: • PRS still suffers from poor reputation • Issues with absentee or constantly changing landlords • need for more high-quality well-managed PRS housing for older people

26. Thank You Charlotte Cook Partner Jenny Pannell Independent Consultant jennypannell@virginmedia.com and LIN PRS Briefings co-author Imogen Blood Imogen Blood Associates www.imogenblood.co.uk Solicitors and Parliamentary Agents Minerva House 5 Montague Close London SE1 9BB DX 156810 London Bridge 6 T. 020 7593 5000 F. 020 7593 5099 www.wslaw.co.uk