The Homelessness Challenge. John Taylor, Mears Housing Management

Transcription

1 John Taylor, Mears Housing Management

2 2 Who we are Mears Housing Management Established in 2013 to offer our housing and care customers with additional services We wanted to create new housing supply, provide value for money services and offer an alternative to traditional providers We own a Not For Profit Registered Provider

3 3 What we do Mears Housing Management We now provide 12,000 homes across the UK Core tenures are: - Homelessness Affordable Care Market Rent

4 4 Homelessness Mears Housing Management Homelessness was our first provision Reducing number of organisations supplying homes Seen as high risk Very challenging market

5 5 Homelessness We are now the largest provider of temporary accommodation for homelessness households Over 5,000 homes under management Nationwide; Cornwall to Manchester and across London and the south east

6 6 Homelessness We provide: - Hostels Nightly Let PSL HAL/D Social Lettings Agency Temporary Modular Long term portfolios; Purchase & Repair

7 7 Supply is possible outside of the south east but becoming harder to get quality and quantity required We are seeing Councils with a B&B and TA problem for the first time Homelessness placements out of Borough are fuelling these issues

8 8 Out of Borough is not a political strategy any more Booming rentals and demand inflating rents LHA freeze is massively damaging TA subsidy at 90% of 2011 LHA plus 40 or 60 totally unsustainable April 2017 how does the grant system work?

9 9 The PSL/HALD model is bust, Grant system will hasten its demise in high demand areas Councils needs to make decisions on how to spend grant and how to manage risk Acceptance that homelessness will be a net cost but how bad will it get over next 3 to 5 years? Investment decisions needed on the risk of not doing something

10 10 The PSL/HALD model is bust, Grant system will hasten its demise in high demand areas. Families will be moved out of Borough Councils needs to make decisions on how to spend grant and how to manage risk Acceptance that homelessness will be a net cost but how bad will it get over next 3 to 5 years? Investment decisions needed on the risk of not doing something

11 11 Partnership with LB Bromley Numbers in TA increasing rapidly. Over 400 in B&B costing 3m per year and rising Plus human cost of families in B&B with shared facilities in the coastal towns of Kent No TA solution available and supply of new rented homes to nominate into all but dried up

12 12 Partnership with LB Bromley Mears Purchase & Repair Variant on Temp to Perm but shares risk. LA typically expected to sign FRI lease and take all risk Our scheme is a JVCo More Homes Bromley. 50/50 LBB/Mears

13 13 Partnership with LB Bromley The JVCo has raised a 81m Bond for forty years Mears will source, purchase and refurbish individual properties Mears will then manage and maintain the stock accepting risk on the service including rent collection

14 14 Partnership with LB Bromley LBB provides a Nominations Agreement which guarantees tenants and occupancy LBB covers rent levels LHA, JVCo charges TA subsidy.

15 15 Partnership with LB Bromley Coupon is fixed, 74% of gross Interest only for first 11 years Amortises to c15% of debt so Fund has risk but keeps rent low Key covenant is DSCR at 115%

16 16 Partnership with LB Bromley Bromley will save 2.7m pa therefore risk of covering a rent increase is massively below the cost of not capturing the saving Bromley will own the units at year 40. The equity will exceed 200m assuming average of 2%pa HPI.

17 17 Partnership with LB Bromley Tenants will have AST with Mears RP Not a magic bullet TA/B&B will continue to grow But does get some families into a secure home of their own.