1.    the proposal to create a not-for-profit Social Lettings Agency and initial investment be approved; and

2.    the creation of a full time Lettings Manager to progress the project, establish and manage the agency be approved.

The Cabinet was presented with a report which provided an overview of the rationale to create a not-for-profit Social Letting Agency (SLA) in Gravesham which will require the employment of a Letting’s Manager to lead the project and deliver the agency.

The Cabinet was informed that, emerging from the Covid-19 pandemic, the Council had been facing an ever-increasing issue in that there were simply not enough suitable properties to house those who were homeless and in need, resulting in them being placed into temporary accommodation.  Due to challenges in accessing the private rented sector locally, the reliance for the provision of temporary accommodation was currently by nightly paid providers, which was the most expensive form of temporary accommodation.

The Council currently had its highest number of households in temporary accommodation which was causing considerable financial instability for the service.  The expenditure for emergency accommodation for 2022/23 was £1,885,410, against a budget of £316,950 which included the Homeless Prevention Grant.

To help lessen the burden on nightly paid and expensive accommodation and provide affordable housing options for those who were likely to experience homelessness, Gravesham needed to access the private rented sector market, and can do so by creating an SLA.

This will enable Gravesham to actively engage with Landlords in the Borough who will be happy to house those on low income and provide a valuable homeless prevention tool. The homes identified as suitable for the SLA will be used to target households in temporary accommodation so that they can reduce the number of placements and offer a reduced expenditure. It will offer Landlords an option that protects them from the current perceived volatility in the rental market and cost of living issues. The model will be to:-

·         Offer a guaranteed rent to a Landlord, reducing the risk to the Landlord of working with the perceived ‘higher risk’ tenant; and

·         Provision of a management service, at a low cost or free, which will be negotiable. This has a tangible cost benefit to a Landlord who will be expected to pay a higher % fee to a High Street Agent.

By offering guaranteed rent and a low or 0% management fee, the rent offered to a Landlord by an SLA can be reduced, closing the gap between the market rent and the local housing allowance rates as detailed within the report. For the Landlord, this will provide a cost benefit, and they will also have no void or rent arrear costs, meaning the SLA should be able to negotiate a lower agreed monthly rent.

The SLA will not be directly responsible for repairs however its role will be to organise these and the recommended first contractor will be Gravesham’s established repairs service, Rosherville. 

The report demonstrated the need for an SLA and how it could enter the market. In the first year, two existing full-time equivalents would be used from the landlord liaison team to support the work. However, there would be a need to recruit a Letting’s Manager to lead the project and deliver the agency. There would also be a need to invest in a property management software system. Using advice of those who successfully operate in this environment, various products had been demonstrated and SME Professional had been identified as the most fit for purpose, streamlined and cost effective system.

It was anticipated that in year one, 20 households will come out of nightly paid units to go into private sector homes.  This will save money to the Council and as more Landlords come on board this will again show a saving on temporary accommodation budgets despite there being an upward trend on placements.

The service will consider Landlords with portfolios for the first 20 homes and therefore the aim will be to source no more than 5 Landlords who were based in the United Kingdom. The Cabinet was informed that a Landlord had already reached out to the Council with the hope to provide 7 units for the SLA and the Service Manager (Housing Options) was also in negotiations with a local estate agent who wants to work with the Council to ensure that the SLA is a success. If Gravesham was to secure 20 mixed units, there is evidence that the SLA would save money over time as demonstrated within the report.

By creating an SLA this would allow Gravesham to build on their reputation, be innovative and also reduce temporary accommodation costs for 20 household in year 1. There are very few other local authorities taking this approach however A Better Choice Social Lettings Agency has been running within Ashford Borough Council for over 10 years successfully.

The Cabinet considered the report and welcomed the creation of an SLA in Gravesham. The Cabinet stated that it was key for the Council to publicise and explain to Landlords the benefits of being part of the SLA. It was also felt that those properties let via the SLA would be of a good standard for tenants.

Resolved that:-

1.    the proposal to create a not-for-profit Social Lettings Agency and initial investment be approved; and

2.    the creation of a full time Lettings Manager to progress the project, establish and manage the agency be approved.