Agenda item

The HH delivered a presentation on Reside, including a breakdown of the current tenures, plans for future growth, the addition of market rent properties to the Reside portfolio and plans to manage this, and the Reside tenancy policy, which enabled residents to stay within their properties as long as they were paying their rent and abiding by the conditions of their tenancy.

In response to questions from Members, the HH stated that:

• The reason as to why the majority of new homes were being built at the intermediate tenure, at 80 per cent of market rent, was to enable the Council to receive more income to help pay for its new build programme, as it was borrowing lots of money to build its new homes. This rent level could be reduced in future, but this would also reduce the annual income gained by Reside, could impact on its ability to run operationally and to repay its loans. These rents would need to be charged initially to meet the financial metrics set by the Council around its investments, and whilst the Council could change the rent policy for new homes in this category in future, it would need to work through any implications before doing so.
• In order to build more social rent and intermediate rent properties, the Council needed to build market rent properties. This income would also contribute towards borrowing and operational costs.
• In charging full market rent tenures, Reside was competing with the private sector and it was therefore conducting more research into where it sat within the market. The private rented sector in the Borough was currently made up of lots of individual landlords that owned one or two properties, and shared accommodation, as well as some private companies that were providing Build to Rent homes similar to the Council. The market rent homes built by the Council would be targeted more to the needs of local residents.
• He would need to send the Committee a more detailed breakdown of different tenures. Reside had built a number of social rent properties, and some at target rents, and others at different rent levels. The vast majority of what was being built was at London Affordable Rents (LAR), which was the GLA proxy for social rent. New GLA funding has now ended LAR and returned to social rents. In Reside, there was not a service charge on top of LAR, whereas the typical model for social rent was rent plus a service charge; however, the schemes were not too dissimilar in regards to overall charges.
• The Council used GLA grant to build social rent tenures, and right-to-buy receipts for intermediate rent tenures. Having market rent tenures, where the Council does not need to use its limited subsidy, is helpful in generating additional income, which can then be used across other Council services.
• There were no proposals at this stage to change schemes that had already gone through Planning.
• It was recognised that the performance of Reside needed to improve for all tenants, especially when considering that it would soon be offering market rent properties. The Interim Managing Director (MD) was very keen to put together a plan to drive improvement across Reside, to improve both growth and the current offer.
• He would consult with Legal as to whether the new properties added to the Reside portfolio past the 200 mark, would present problems in relation to the Housing Revenue Account (HRA).

In response to a question, the Cabinet Member for Community Leadership and Engagement stated that the Council’s Community Solutions team and Homes and Money Hub in Barking Learning Centre, could be accessed for support by residents struggling to pay their rent. It was also hoped that such advice could be provided from the Council’s Community Hubs going forward. Market rent properties would also enable residents to have more choice in where they lived, as not all residents who wanted properties were only able to afford submarket rents. Some private companies had already built private rented sector housing in the Borough and many people were moving into this, highlighting the importance of a mixture of tenure and choice.

Due to unforeseeable reasons, the MD was unable to attend this meeting and therefore, the Chair requested that Reside representatives return to a future meeting of the Committee to help Members better understand the future plans of Reside and ensure that improvement was happening quickly enough when considering the vast number of new properties that Reside was soon to acquire.

At this juncture, the Committee resolved to suspend Standing Order 7.1 at Part 2, Chapter 3 of the Council Constitution to allow the meeting to continue beyond the two-hour duration threshold.