A letting agency aimed at private landlords and tenants, set up by a north London council ,has let just two properties in ten months.
The revelation calls into question private agencies set up by other local authorities..
Haringey Council’s Move 51 Degrees North, which has so far cost £406,618 in setting up and running costs, is “in the process of marketing two further properties”.
Its remit is being “widened to offer incentivised assured shorthold tenancies to private landlords”, the council’s response to Lib Dems’ questions showed.
This will be a “cost effective alternative to most other temporary accommodation options available, and will help Homes for Haringey continue to tackle homelessness in the borough.” Homes for Haringey is the arm’s-length management organisation that manages the council’s housing stock for it.
Gail Engert, Haringey Lib Dem leader of the opposition, attacked the progress of the letting agency so far suggesting it was a “failed project”.
She said: “Local people rightly expect their council tax money to be spend on vital services and not wasted on failed projects.
“Haringey residents pay one of the higher council taxed in London and that money should be spent wisely and not wasted.”
The council’s cabinet member for housing, regeneration and planning Alan Strickland also revealed in the answers to the full cabinet last month that Move 51 Degrees North agency was not expected to make a profit until it had been trading for three years. It started up in October last year.
The agency was set up as an alternative to private letting agencies, with the intention of offering tenants and landlords a “better deal”.
EYE reported when the agency was formally launched in March this year.
Tenants pay set up fees of £180, £72 for reference and credit checks and £50 for referencing and credit checks.
For a let only service, landlords pay £900 per year in the first 12 months, then £700 for the next year and £500 in the year after that.
Sadiq Khan pledged in his manifesto to become London mayor that he would set up a capital-wide not-for-profit letting agency to “promote longer-term, stable tenancies for responsible tenants and landlords”.
A Homes for Haringey spokesperson said: “Move 51 has two properties in management and is in the process of marketing two further properties.
“Its remit is being widened to offer incentivised assured shorthold tenancies to private landlords as a cost effective alternative to most other temporary accommodation options available.”
This would help the council “continue to tackle homelessness in the borough”, she added.
Comments (10)
What’s going on – I thought Labour wanted tenant fees banned!
Ah yes but only when they are not receiving the money!
I set up a social letting agency in 2002 and by 2008 it was self funding, had 250 properties under management and was producing a surplus of £20,000 a year. No tenant charges and the landlord fee was 10% plus VAT for full management (no other fees or income stream). The total initial funding from parties involved was £150,000.
The “success”, if you want to use that phrase, was due to the increase of the private rented sector during that period, Housing benefit rates being similar to market rates, and the positive nature of the two councils involved. The agency was staffed by private sector staff and owned by a social enterprise.
Unsure in this day and age, if the social letting agency model would work from scratch when you consider the gulf between LHA rates in London and the near 0 growth of the PRS.
bad idea
bad implementation
or both?
That’s what you get when the business is not being financed out of their own pockets, like the rest of us.
*some work
I have spoken with a number of people in various councils about housing. They just hold their hands up and say. “Basically we have no idea what we are doing”. Private sector has experience of these things ,has been doing it for years and we shouldn’t be playing with stuff we don’t know or understand. But that’s government for you . They love a good initiative to show they are moving forward.
I did some for a property management company – they have social housing (council-led) on their books but the councils have to market those available properties as private sector (getting the management company to do it all) to generate any interest in the property.
Two reasons: 1 – people don’t like social housing and what it implies (benefits, low income, trouble with police etc). 2 – they don’t know what to do.
Perhaps landlords are too savvy to use this!
Maybe it’s time those landlords considered investing north of the border!