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Why it’s time for housing associations to intervene directly in the private rented sector
The growth of the private rented sector is leaving communities behind in Manchester. We can make a difference, writes Mike Simpson
Over the past 10 years the private rented sector in Manchester has grown significantly and is now the majority tenure in a number of areas.
While the city’s economy has grown – and with it average housing market values – in some parts of the city, streets that were once mixed with renters and owners are becoming more and more exclusively a low-value, low-quality renter market.
These can be characterised as communities on low wages or benefits, where rents sit on or around Local Housing Allowance (LHA) rates and where ownership is fractured into some long-term investors but also many speculators with no interest in property or effective management.
At a time of low growth and turnover in our sector, these properties and areas have become a significant route to a home for many households that have been displaced by rising values elsewhere and financially unable to move on.
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Low income concentrations compound further a lack of investment in the local economy, both public and private sector, and add to an isolating of these communities in sometimes insecure and poor-quality offers.
At One Manchester we have been talking to Manchester City Council and other potential partners about investing in these homes and neighbourhoods to bring greater stability in terms of ownership and property management.
Integral to this is the linking of these localities into our place-based offers such as financial inclusion, employment, training and enterprise.
We are linking into council enforcement agendas as well as looking at on and off-market acquisition.
Our aim is to acquire and invest in up to 300 properties in targeted areas.
There will be a number of challenges around scale, condition and acquisition trying not to inflate prices as speculators look for profits, but by building up an ownership we believe that we can begin to influence positive change and connectivity to our place-based offers and those of our partners, encouraging further investment.
In looking at tenure it’s not about getting hung up on replacing the private rented sector wholesale with social or affordable housing tenancies, but bringing a range of options into play, with the baseline being well-run, affordable homes at or around an LHA rent level.
“By building up an ownership we believe that we can begin to influence positive change and connectivity to our place-based offers and those of our partners, encouraging further investment”
They can complement our existing homes and our developing programme for building new homes, but not be solely dependent on grant.
We can acquire and refurbish for less than it will cost to build new, and expand into areas where there is a need for more market stability, proper management and value for money.
Ultimately, we may look to grow further or recycle our investment to release funds by selling on homes to residents or other accredited landlords – or just hold on to homes long term.
This won’t be a universal panacea, and the private sector market will still be a place of primarily private ownership and business, but hopefully this small start will bring new like-minded owners and investors to streets and communities needing good homes with a stronger connection to the places and city they are part of.
Mike Simpson, group head of growth, One Manchester