Exempt accommodation claimants in Birmingham double to 22,000 in three years

Since 2014, the number of exempt accommodation properties and the number of people they house has ballooned.

In April 2014, Birmingham Council recorded only 3,679 exempt accommodation units in the city. By early 2018, this had grown to 11,000, before hitting 14,000 in December 2019 and then 20,000 for the first time last October.

Some experts believe that the reason for the popularity of the model is due to the abundance of large properties in Birmingham that are relatively cheap to buy or lease and can be easily converted into houses in multiple occupation (HMOs). Those working in the sector have also told Inside Housing that the housing benefit regime at the local authority in previous years was conducive to the model taking a foothold in the city.

Of the seven biggest providers of exempt accommodation in Birmingham, three have been graded as non-compliant with the Regulator of Social Housing (RSH), while three currently have their gradings under review. These registered providers house 16,267 claimants – 73% of all claimants in the city.

The biggest provider of exempt accommodation in the city is Reliance Social Housing, which the council has listed as having a total of 1,591 properties, which house 5,642 claimants.

The number marks a rapid increase in less than six months, with a similar dataset from the council in October recording the number of Reliance claimants at just 4,421.

According to the regulator’s regulatory judgements table, Reliance has not yet been graded on governance or financial viability.

According to the data, the second biggest provider is Concept Housing Association, which houses 3,773 claimants in its 1,200 properties. Concept had its grading put under review in February, with the RSH now investigating the association for issues that may impact its compliance.

For an association to have their gradings under review, it means the regulator is investigating matters at a landlord which may affect its compliance with governance or financial viability.

David Fensome, chief executive of Concept, told Inside Housing that it has grown quickly in the past two years in response to the urgent need in Birmingham for vulnerable people and that it is working closely with the council to ensure high-quality homes are being provided.

Inside Housing reported in March that the association would not be entering new lease arrangements as a necessary step to “preserve the long-term future of the organisation”.

The third biggest provider is Ash-Shahada Housing Association, which owns 642 properties with 2,539 exempt accommodation units.

Ash-Shahada is one of a handful of registered providers that have expanded into providing exempt accommodation in Birmingham, with its original base situated and providing housing in London. The association was also placed on the RSH’s gradings under review list alongside Concept in February.

Others on the list include Sustain UK, which owns 478 properties and houses 1,838 claimants; New Roots, which has 206 properties and 1,017 claimants; and Prospect Housing, which has 278 properties and 927 claimants.

Sustain was graded G3/V2 in January 2019, which means it was non-compliant on governance by the regulator but was compliant on its financial viability measures.

New Roots received a G3/V3 rating in February 2020, meaning it was non-compliant on both governance and financial measures. At the time the regulator found the provider to have “significant weaknesses” in its business planning framework and “inadequate risk management processes and internal controls”.

None of these gradings mentioned the quality of housing or conditions in the properties managed by the providers.

Prospect was downgraded in October last year to G4/V3. G4 is the lowest possible grading for governance. The basis of this grading included reviews into two serious safeguarding incidents, which identified weaknesses in procedures and controls of the landlord over services provided by third-party managing agents.

Prospect confirmed in March that it had taken the decision to cease operations this year and would begin a solvent closure. The provider will be closing in the summer.

The list also includes Three Conditions Housing Association (3CHA), a Milton Keynes-based registered provider that currently owns 147 properties and has 531 claimants in the city, according to the data. It is also currently on the RSH’s gradings under review list.

Trident Housing, ExtraCare Charitable Trust and Midland Heart make up the rest of the 10 biggest providers of exempt accommodation in Birmingham. For all of these providers, exempt accommodation represents just a fraction of the housing they provide.

Both Trident and Midland Heart received G1/V1 ratings from the regulator in the past six months, the highest grading registered providers can receive for governance and financial viability.

ExtraCare is a provider of housing for people over 55 across the Midlands and is regulated by the Quality Care Commission (CQC). Of the organisation’s 15 care facilities, all but one are rated as good or outstanding by the CQC.

While exempt accommodation is particularly acute in Birmingham, it is present in other cities across the UK such as Bristol, Liverpool and Manchester. Data from December 2018 showed that there were more than 4,600 claimants in Liverpool, 3,070 in Manchester and 2,740 in Bristol – the numbers in those cities are likely to have grown since.

The increase in claimants comes as Birmingham Council looks to restrict the growth of exempt accommodation in the city, as well as driving up standards for those living in these properties.

Last October, the council was handed more than £1m by the government for a pilot scheme aimed at driving up the quality of exempt accommodation in the city.

In March, this money funded the creation of a charter of rights and a set of standards for exempt accommodation claimants, which places new requirements on providers and managing agents. This was also supported by the council recruiting a new team of inspectors and social workers to check properties and ensure tenants’ conditions meet the standards.

A Birmingham Council spokesperson said: “Our revenues and benefits team are working in line with other authorities and we are developing good working relationships with the regulator.

“As with this whole area, we here in Birmingham feel the legislation needs to be tightened, possibly through of a supported exempt version of Local Housing Allowance, or definitive actions that are triggered following regulator reviews.

“There is no advantage to the council in regards to how the exempt market is funded, especially given the additional pressures we face across our housing and community safety teams. The police are also in a similar position with stretched resources as a result of this market.”

Pauline Hughes, chief executive of Sustain UK, told Inside Housing: “Sustain UK broadly welcomes Birmingham City Council’s approaches to slowing the growth of exempt accommodation, as well as addressing the long-term need to raise the standard of supported accommodation and properties for those in urgent need of housing.

“In line with Birmingham City Council’s objectives, Sustain UK froze its available bed numbers two years ago, and also ceased offering properties in identified hotspots, including the Stockland Green Ward, where we feel the social infrastructure is over loaded and cannot accommodate ever-increasing levels of Housing of Multiple Occupation (HMOs) and supported living projects.

“Sustain UK has also signed up to Birmingham City Council’s recent ‘supported exempt accommodation quality standards’.

“Our aim is to help to improve living standards for those in need across our city. In our experience, vulnerable people in Birmingham should aspire to decent housing and appropriate support via the benefits system.

“Undoubtedly, the situation in Birmingham has reached a tipping point, and whilst it’s right to focus on a number of ‘rogue landlords’ that abuse the system, we must keep encouraging those organisations who work tirelessly to protect people’s right to a decent life.”

The provider added that the number of properties it owned across both Birmingham and Loughborough as of the end of February was 464, with the number of beds in housing benefit payment with Birmingham Council at 1,790.

Prospect said that as of 31 March it had 253 properties and 842 exempt accommodation claimants.

Inside Housing has contacted Reliance, Ash-Shahada, New Roots, 3CHA, Trident, Midland Heart and ExtraCare for comment.

Update: at 10.53am 04/06/21

The comment from Sustain UK was updated