This report will look at the change in government policy regarding the allocation of social housing to introduce a choice based lettings scheme.
The report will cover the history of government policy in this area and will look at the allocation of social housing in England, Scotland, Wales and Northern Ireland.
The report will explain what a choice based lettings scheme is and how this differs from previous allocation of housing schemes.
The report will examine the process of allocation of housing in West Somerset in comparison to a Housing Association in Dorset and will then go on to look at the impact the change to a choice based lettings scheme has had on Magna West Somerset.
History of Allocation of Social Housing Policy in England
Historically social housing was allocated by individual landlords or Local Authorities based on their own policy. Each would hold its own housing register and individuals who wished to live in social housing would register with all the Local Authorities and landlords in the area they wished to live to maximise their chance of being housed.
Allocations could be based on a points scheme, a date order scheme, a banding scheme, a merit scheme or a mixture of them.
A points scheme would give points for various needs and those with the greatest number of points would be housed first. A date order scheme would be to rank applicants according to the length of time they had been on the register. A banding scheme involves classifying applicants into categories of need and a merit scheme was based on an application form and interview so able to take other factors into consideration that are difficult to measure (Cope 2000).
The Housing Act 1996 Part VI is the main legislation that governs the allocation of social housing at this time. This was revised by the Homelessness Act 2002 and again more recently by The Localism Act 2011 (Wilson 2012).
The Housing Act 1996 part VI specify states a requirement for all Local Authorities to have an allocation scheme that was based on priorities of need in allocating housing and also a requirement to manage a housing register (legislation.gov.uk 2013).
The present Coalition Government along with the previous Labour Government have put much emphasis on policy that will extend choice and so this has become a major part of policy including housing policy and "is seen as an important mechanism to raise standards in public services" (Thornhill 2010)
In April 2000 the Government published a green paper entitled Quality and Choice: A Decent Home for All. This document set out the proposal to change to a Choice Based Lettings Scheme and stated that there would be a new fund established to pilot choice based lettings schemes in different areas of the country (Department of Environment, Transport and the Regions 2000).
In the Homelessness Act 2002 the Government introduced amendments to Part VI of the Housing Act 1996 to change the allocation of social housing and to introduce choice based lettings schemes within the UK. This act also abolished the need for Local Authorities to hold a housing register although in practice most continued to do so.
Since 2002 the Department of Communities and Local Government has offered a cash grant for the setting up of choice based lettings schemes. Somerset took advantage of this funding in 2007/08 and obtained a grant of £100,000 to develop Homefinder Somerset.
In June 2012 Allocation of Accommodation: Guidance for Local Housing Authorities in England was published which replaced previous Government guidance and brings together guidance on changes from the Localism Act 2011 and also with regard to housing current and ex-service personnel (Communities and Local Government 2012).
Allocation of Housing in Scotland, Wales and Northern Ireland
In 1999 the Scottish Parliament, Welsh Assembly and the Northern Ireland Assembly were all set up allowing for the transfer of some government powers for these countries of the UK to regional government.
Each of these regional bodies has developed its own housing strategy and policy that affects the allocation of housing in their respective countries.
Most social housing in Scotland is allocated using points schemes at this time however a number of Local Authorities and landlords are developing Common Housing Registers which allows prospective tenants to fill in just one application form and there is then one housing list that is accessed by a number of different landlords (The Scottish Government 2013).
In Wales there is also a mixture of allocation schemes, some points based, other common housing registers and some choice based lettings schemes (Welsh Government 2013).
In Northern Ireland the Northern Ireland Housing Executive is responsible for the management and allocation of the majority of social housing. Allocation of housing is made using a points based scheme (Northern Ireland Housing Executive 2013).
Choice Based Lettings
Perception that the allocation of Social Housing is unfair has always been a problem which the Government hopes to overcome with the introduction of choice based lettings. In a 2008 poll carried out by Ipsos MORI only 23% of respondents felt that allocation of social housing was fair and 32% felt that it was unfair (Communities and Local Government 2009).
Choice based lettings is a scheme that is based on the Delft Model of allocations operated in the Netherlands (Thornhill 2010).
Choice based lettings is seen as a way of allowing tenants to have a choice in where they live and for the allocations policy of Local Authorities and Social Housing Landlords to be more transparent.
Choice based lettings simplifies the process of registration on a housing waiting list for an applicant as they now complete one form for all the local authorities and partner landlords in the scheme.
An applicant under choice based lettings does have to be more proactive by checking what properties are available and placing bids whereas previously once they had registered they did not have to do anything until offered a property. The hope is that this will create more sustainable communities with people being offered a property they have chosen (Sector UK 2009).
Most choice based lettings schemes are internet based although they also have the chance to bid for properties via the telephone and some also in person at council offices. This can be problematic for those applicants who do not have access to a computer. Although libraries offer computer access this is limited and not all rural locations have this facility.
As of 1st April 2012 91% of Local Authorities in England participate in a choice based lettings scheme (Department for Communities and Local Government 2012).
Research into choice based lettings schemes found that it can be cheaper than previous methods of allocation due to quicker turnaround of properties and fewer re-lets although the actual cost of running the scheme can be higher (Callaghan 2006).
Allocation of Housing in West Somerset
Prior to the introduction of choice based lettings Magna West Somerset held its own housing list and also had lettings agreements with the Local Authorities to house people from their waiting lists. From the lettings policy allocation was made at a ratio of two thirds nominations from the Local Authority and one third from the Magna West Somerset list.
West Somerset Council operated a points based allocation scheme for its housing register and Magna West Somerset operated a banding system for its own list.
Nominations for empty properties from the Local Authority were received within 24 hours. No references or checks would be made on these nominations received from the Council.
Homefinder Somerset is the Choice Based Lettings Scheme for the allocation of social housing in the Local Authority areas of West Somerset, Taunton Deane, Sedgemoor, Mendip and South Somerset. (Homefinder Somerset 2011). It was developed by the Somerset Strategic Housing Partnership and went live on 8th December 2008.
Individual partnership landlords of the Homefinder Somerset scheme no longer hold their own waiting lists for housing instead anyone wishing to apply for social housing registers with one of the five Local Authorities using one application form.
An application is assessed against criteria set down within the Homefinder Somerset Common Lettings Policy and depending on their circumstances, applicants are placed in one of four bands, Gold, Silver, Bronze or Emergency Priority Band (Homefinder Somerset 2011).
In addition to their banding applicants are also limited on the size of property they are eligible to bid for depending on the household composition.
Properties are advertised weekly by each partner landlord and are available for applicants to bid on from Wednesday until Sunday. Each applicant can place up to three bids on properties each week either on the internet or by telephone.
Some properties are advertised with criteria attached as detailed in the local lettings policy or in planning regulations attached to the property to prioritise the type of person a particular property is let to ie a sheltered or support need or the applicant must have a local connection to the area.
A Comparison of Lettings
Magna West Somerset is based in Williton, West Somerset. It owns and manages over 2100 properties (Magna West Somerset 2013). Magna Housing Association is based in Dorchester, West Dorset and owns and manages over 9000 properties (Magna Housing Association 2013).
Magna West Somerset advertises all vacant properties for rent in Somerset via Homefinder Somerset except for 57 supported properties that are let via nomination from Social Services.
Magna Housing Association advertises its vacant properties in Dorset through Dorset Home Choice but also holds its own transfer list. Through an allocation agreement with Dorset Home Choice Magna Housing Association lets up to 25% of its vacancies via the transfer list and 75% via choice based lettings on Dorset Home Choice.
The process of letting and allocating properties at Magna West Somerset is the responsibility of the Re-Housing Officer along with a part time Housing Assistant. There is also a Void Surveyor who does property inspections, the viewings for prospective tenants are carried out by Tenancy and Estate Management Housing Officers and the sign-ups of new tenants is done by the Office Manager.
At Magna Housing Association there are a team of 7 Re-Housing Officers and Assistants who deal with the entire re-let process including all inspections, viewings and sign ups.
The comparison done annually by Housemark of value for money for lettings for 2011/12 gives Magna West Somerset a good performance and high cost rating with a cost per property of £60 and a performance score of 68. Magna Housing Association has a good performance and low cost rating with a cost per property of £34 and a performance score of 75 (Housemark 2012).
Both Associations do their own shortlisting from the choice based lettings schemes however Magna Housing Association has found this to be a much quicker process than previously when they had to wait for nominations from the Local Council. Magna Housing Association has also found that choice based lettings has drastically reduced the number of refusals of properties that they have therefore making the letting process overall much quicker.
At Magna West Somerset the process has been found to be much longer as nominations previously were received within 24 hours. With some properties especially those in rural locations the number of refusals for the properties has increased. One reason for this is that now that the properties are open to anyone registered within the whole of Somerset it is found that people are bidding on the property thinking it is much closer to other areas of Somerset and then when they are contacted regarding a viewing and find out where the property is actually situated they then turn it down.
As part of the letting process at Magna West Somerset a full verification of the applicant is done to confirm the details from their application are correct and also a reference is taken from their present landlord. If a prospective tenant has previously broken any terms of a tenancy ie rent arrears or anti social behaviour, under the Homefinder Somerset Common Lettings Policy they can be skipped on the shortlist and not offered a property.
This verification and obtaining of a reference takes time to do for each property however does allow for any support needs by prospective tenants to be identified before they sign a tenancy agreement so that these can be put in place to assist them to sustain the tenancy. It is then hoped that in the long run these extra steps at allocation will reduce the numbers of tenants getting into arrears or causing anti social behaviour and ultimately reduce evictions.
Magna Housing Association does not do a full verification or obtain references on their prospective tenants. The only checks they make are on the address for the applicant and family composition. This is another reason for the letting process to be much quicker for Magna Housing Association and for their cost to be much lower.
Impact of the change to Choice Based Lettings on Magna West Somerset.
The main impacts on Magna West Somerset with the introduction of choice based lettings are a rise in cost and the workload for the Re-Housing Officer increased.
The cost of lettings increased due to extra staff being required due to the greater workload. Prior to the introduction of choice based lettings there was only 1 Re-Housing Officer dealing with lettings. In 2010 a part time Housing Assistant was appointed to assist with lettings and also a full time Void Surveyor to oversee inspections and all repairs work in empty properties.
Another cost implication is that for each advert placed on Homefinder Somerset advertising an empty property there is a cost of £29.99. Under the previous nominations system from the Local Authority there was no cost.
The time taken to let properties increased with the introduction of choice based lettings due to the increased workload for the Re-Housing Officer. With the increased staffing levels in 2010 this time has now reduced.
Graph 7.41 Average Number of Days to Re-let Properties
Source: Magna West Somerset Housing Association Performance Indicator and Management Information Pack 2009, 2010, 2011, 2012
Choice based lettings was introduced in England to give applicants more choice on where they live and in an attempt to counteract the view that allocation of social housing is unfair.
Choice based lettings was introduced in legislation in the Homelessness Act 2002 and in subsequent years Government grant funding was offered to Local Authorities to use to set up a choice based lettings scheme.
Choice based lettings although more expensive to run is meant to decrease the cost of re-letting overall due to reduction in turnaround times and number of re-lets however this was not found to be the case at Magna West Somerset where costs increased and at first so did re-let times.
Choice based lettings does create more sustainable tenancies by allowing tenants to chose where they wish to live they are more likely to stay at that property rather than quickly wanting to go onto a transfer register.