Low Demand and Social Lettings - Bad for Business?
It seems strange to talk about low demand when the national media is obsessed with housing shortages, but like so many other issues, the national picture sometimes obscures regional differences. Here in Bradford we experience high tenancy turnover and low demand for some of our stock, and we are increasingly questioning the effectiveness of social lettings for both meeting need and enabling us to occupy properties in a timely manner.
We manage just under 22,000 properties. 50% are flats and, generally speaking, flats have lower demand than houses. Amongst flats, 2-bedroomed flats have the least demand, especially in high rise blocks. 8% of our stock is high rise.
We also face competition from the private rented sector. In Bradford, this has grown rapidly due to low property values and the ease of getting buy to let mortgages. However, with the exception of houses, the rents charged in the PRS are very similar to social rents.
Add to this situation the effects of welfare reform; for many years, our larger flats had been under-occupied due to low demand. When the bedroom tax was introduced, our tenancy turnover shot up. Not only did many people who were under-occupying move out, but it was also harder to find people to move in.
The success of the social housing allocations approach is profoundly affected by all these factors. We have now tried two types of social housing allocations systems - the choice based lettings (CBL) scheme and the VBL matching system that we developed ourselves. Neither system has worked particularly well for low demand stock and has taken up lots of officer time to find customers, particularly for flats. This is echoed in many parts of the UK, and many people are increasingly using Rightmove.
So why are social lettings ineffective for low demand? Social housing lettings systems are set up to ration property on the assumption that there is more demand than supply. There is effectively no marketing of our stock or our offer and I suspect that most people don’t come to us to rent property but go to lettings agencies because they are much higher profile. If people do seek out social housing, they either go through us or the local authority to join the district waiting list where huge effort goes in to banding and prioritising. At the same time, it seems that people are also looking elsewhere because they are joining the list at the point that they are interested in moving, so we lose them if they find something quickly in the PRS.
So, is there another way to balance meeting need with removing barriers to allocation in low demand areas? In my session at CHC’s One Big Housing Conference next month, I will cover how we are tackling this. Book your place here: https://chcymru.org.uk/en/events/view/2017-one-big-housing-conference