Private sector leasing: An innovative new approach

Like other authorities throughout Scotland, we at South Ayrshire Council are keen to reduce our reliance on Bed and Breakfasts in providing temporary accommodation for homeless households.  In 2013-14, for instance, 405 households were accommodated in this way, and in recent years we’ve had a higher than average spend on Bed and Breakfast type accommodation. 

As a result, we’ve been eager to consider and develop alternative approaches to providing temporary accommodation to homeless households.   One such approach is our successful Private Sector Leasing scheme, providing 64 properties for temporary accommodation throughout South Ayrshire.  Through the scheme, landlords receive a guaranteed rental income over a period of 3 to 5 years, whilst the authority is able to access good quality accommodation at an affordable cost.  Despite the PSL scheme’s success, it remains dependent on the circumstances of individual landlords.  Indeed, some owners have informally noted that they’re participating in the scheme while the property market is relatively slow, and may leave the scheme and sell if there are significant improvements in market conditions.  As a result, in addition to the need to find more temporary accommodation from alternative sources, it was also necessary to ensure that a sustainable supply of properties could be secured for the longer term.  At the same time, South Ayrshire has a high number of privately-owned properties within its boundaries that have been empty for significant periods of time.

In response to these issues and opportunities, a proposal was developed to significantly expand our PSL scheme by leasing a large number of properties from a single supplier.  Following a competitive tender process, we entered into an innovative partnership with Leena Homes, a property procurement and management firm based in Harrow.  This relationship will see the procurement of 50 properties in South Ayrshire by Leena Homes through a mix of both purchases and long-term leasing agreements with owners, with suitable empty properties being targeted in the first instance.  These properties will then be used as part of our Private Sector Leasing scheme, with Leena Homes continuing to hold responsibility for the ongoing maintenance of these properties.  Leena will also be responsible for ensuring properties have the required gas safety certificates, energy performance certificates and adequate provision for detecting fires.  Every property selected by Leena Homes for purchase or long-term lease must be agreed with council officers prior to being taken onto the scheme, and will be used as temporary accommodation for a period of 10 years. 

At the moment, the scheme has procured 7 properties, of which 5 were long-term empty homes and a further 4 properties are anticipated to be brought onto the scheme in the next month. 

This allows for a clear reduction in the costs of providing temporary accommodation when compared with Bed and Breakfast.  In addition, the long-term nature of the scheme means we can access a more secure supply of privately-owned properties.   At the same time, the scheme offers tenants an opportunity to access good quality, temporary accommodation until a more permanent solution to their housing needs can be found.  It is anticipated that Leena Homes will procure these 50 properties within the next 12 months.

For more information on the scheme, please contact Kevin Anderson on 01292 612982 or Ross Morris on 01292 612206.

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2 Comments

FM
Former Member 5 Years Ago
Hi Ross, You know already that I love this scheme - it really is a case of killing two birds with one stone (or home!). A great example of empty homes work and increasing the supply of good quality temporary accommodation! Lisa
DG
David Gibbens 5 Years Ago
Hi Ross David Gibbens here of the Empty Homes Network and ex-Empty Homes Officer and Housing Enabling Manager for Exeter City Council. Exeter has run a PSL scheme continuously since the flexibility to do so was first introduced back in the early '90s and it was always a key part of the work of our team to source properties. Subsequently we went on to develop EXtraLet, where rather than leasing we managed properties on behalf of the owners: this was for homeless prevention. The two schemes run side-by-side and the whole area of homeless accommodation is dear to my heart (as I was also Rough Sleepers Initiative Co-ordinator for a few years). I'd love to do a Case Study on your approach (I hope we can talk about that) but key questions that spring to mind based on my experience would be as follows: a) Given that you have a portfolio of 64 PSLs and thus apparently have the structures to procure and manage them, what were the key factors that decided you to outsource procurement and management? b) Are there any issues around having two separate portfolios of temporary accommodation of broadly similar nature? c) How do the commercial arrangements work between you and Leena? What guarantees do you give them and what do they give you? I'd love to know more. Best wishes David Gibbens 07528 312932