Guest blogger Susan Aktamel shares her experiences as the director of Homes for Good – a new breed of letting agency.
After 14 years as a landlord, I decided to set up a different kind of letting agency in 2012. There were a number of reasons for this. My own experience of working with letting agents had been less than satisfactory, so I wanted to create a service I would be happy with. I also wanted to create a social business, which made a positive impact on people’s lives, and which would reinvest its profits in this change – and where better to start than with their homes? Finally, I wanted to develop some innovative solutions and approaches to the way people access the private rented sector, particularly people accessing benefits.
This agency would offer landlords what they want most – fast payment of rents, clear, transparent communications about repairs, and the knowledge that their investments are being looked after. Tenants would be treated with friendliness, respect and high levels of customer care would ensure their experience of finding a new home was easy and hassle free. All of this would be underpinned by the core values of treating people well, doing the right thing, and the concept that a secure home is the foundation for all our lives. Thus, Homes for Good was born in February 2013.
The private rented sector is a dynamic, rapidly changing environment. We know that it is continuously expanding – with more homes in Scotland now than the housing association sector. Social house-building still at an all-time low, mortgage supply is scarce, and institutional investors are moving into the sector. This only means one thing – demand and supply will continue to increase.
Scottish Government has reinforced the importance of the PRS through its strategy and its presence in the new Housing Bill and through its numerous meetings with bodies like the Scottish Association of Landlords and the Council for Letting Agents. There are 100,000+ landlords, and hundreds of letting agents across the country. The relatively recent introduction of mandatory tenancy deposit schemes has caused some turbulence in the industry, with some letting agents closing down, causing untold distress to tenants and landlords alike. However, the industry is responding positively, with the establishment of membership bodies for landlords and letting agents, focused on raising standards within the PRS, and plentiful access to training to ensure we all know what we are doing!
Current debate and work within the industry and Government focuses on raising standards, introducing increased regulation and changing the tenancy regime to provide more security for tenants. All of these actions are necessary for a healthy, fit-for-purpose private rented sector as an essential part of the housing fabric of Scotland.
Over the last 16 months at Homes for Good we have developed real insight to the actual issues facing tenants and landlords alike, particularly across the West of Scotland. To coin the well-worn phrase, there are two sides to the story, and a balanced, non-political perspective is essential to understand what is really going on in the private rented sector today.
Landlords come in many shapes and sizes. Across the UK, the numbers are consistent: 70-80% of landlords own just one property – that’s a lot of clients to work with! They have become landlords for many reasons – as a pension plan, because they couldn’t sell their property, or simply that they wanted to have a property investment. These are not the wealthy landlords portrayed in the media – they are ordinary people, who are happy to comply with regulation and understand their responsibilities to tenants. In many circumstances, the rental income just covers the mortgage and little else, so they are not getting rich on the back of tenants. The rest are “portfolio landlords”, who take a more business-like approach to their investments. Often this means high quality, efficiently managed homes. Sometimes these landlords take a less professional approach, either focusing on maximising profits or minimising losses, depending on the state of their portfolio. As a letting agent, we see the full spectrum of this. It is our job to understand the landlord’s motivation for offering a property to let, manage their expectations and point out their obligations along the way. We have successfully attracted landlords who share our values and understand the importance of providing decent homes, and their role in creating a supply of housing across Scotland is crucial. We work closely with them to understand their current and future circumstances, which in turn enables us to support our tenants in their homes.
Tenants equally come from all walks of life. As well as students, and young professionals, the typical “private renters”, there is an increase of working families and people accessing benefits looking for homes within the private rented sector. The reasons for this are clear – waiting lists put social housing out of reach for anyone on low income, anecdotally we have heard of waiting times from 2-14 years in Glasgow – and if you need a home now, you cannot wait. The average tenancy within the PRS is around 19 months, so this does create churn and therefore supply in many areas, and provides increased choice to tenants. Working families are increasingly choosing to move up the property ladder through renting – that is, getting a bigger house through renting rather than buying (and in some instances renting out their existing, mortgaged home). These situations are a direct result of the recession, the challenges facing the housing market, construction industry and public spending constraints, and will take some time to change.
If you are working with decent income, securing a privately rented home is relatively easy. You can prove affordability, probably have all the background information and references required, and your choice is limited only by supply in your desired location.
If you are in receipt of benefits, it is a different story entirely. In a recent mystery shopping exercise undertaken by the Homes for Good team, over two thirds of Glasgow letting agents approached refused to consider people on benefits as tenants (even though the rents were affordable for them), and the remaining third who were willing to consider them imposed conditions which many tenants simply cannot meet. If you are a single young person (up to 35 years old), the housing benefit you will receive generally will not cover the rent for a one-bed flat anywhere in the West of Scotland. This means two things – people are forced into poor quality housing, of the kind Shelter Scotland so rightly campaigns against, due to lack of choice, and put simply this is a new homelessness crisis waiting to happen. We are working hard at Homes for Good to tackle this through pilot projects around funding deposits and flat sharing. Where do people go if they cannot find a home they can afford?
Current debate and work within the industry and Government focuses on raising standards, introducing increased regulation and changing the tenancy regime. All of these actions are necessary for a healthy, fit-for-purpose private rented sector as an essential part of the housing fabric of Scotland.
Working with tenants and landlords day in, day out, it is clear that “it takes all sorts”. We have great tenants, and have declined to offer homes to people who were clearly not. We have lovely landlords who care about their tenants and their properties, and we also see landlords who we politely choose not to work with, as it is clear their motivation and standards are not the same as ours. We have some great letting agency colleagues who we do business with, and others who frustrate and anger us with their poor practice and impact on people’s lives. The messages of rogue landlords / tenants from hell, depending on who is delivering it, are not helpful or balanced. We simply need to highlight the good practice, while constantly doing our best to eliminate the bad. This is how things will improve in the long run.
For more information visit the Homes for Good website.