The Company has identified target rental locations using statistical analysis of regional data of the housing waiting list, empty properties data, property prices and rental price averages and through partnership research has identified suitable properties for the Supported Housing Programme
The Company’s Directors believe that there are critical areas within the social residential real estate market which have a significant imbalance between supply and demand and where the experience and expertise of the Company, its Directors, Advisors and employees, can be utilised. The following information is the summary of the research carried out by the Company.
Housing Waiting List
- The housing waiting list has grown 66% over the last 15 years in England.
- At the end of December 2013, 1,688,892 households were on the housing waiting list.
- Nearly 57,000 households were living in temporary accommodation in 2013, 77% have children.
- 32% of households waited for more than a year and more than 21% waited more than 2 years to be allocated their home.
- The overall rate of overcrowding in England in 2011/12 was 3% with 643,000 households living in overcrowded conditions.
- 7% of social renters and 6% of private renters are living in overcrowded accommodation.
- Currently (October 2013) there are 635,127 empty properties in England, of which 37% have been empty for longer than 6 months.
- These empty properties could theoretically house nearly 40% of the housing waiting list.
- Around 5% of empty properties are owned by LAs.
- There is also a large stock of empty commercial properties that can be easily converted into permanent accommodation.
- In March 2014, the Home Builders Federation said 320,000 homes need to be built each year.
- In 2013 just over one hundred thousand houses were started to be built, less than 60% of the number before the 2008 recession.
- Over the last 2 years there has been an 8.5% decrease in the number of houses that are starting to be built.
- In 1999 12% of LAs had transferred their stock into the Housing Association sector and since then that figure has increased by an average of 2.4% a year.
- In 2013 over 46% of LAs had transferred their stock into the Housing Association sector.
LA and RP Average Rents
- LA and RP average rents have seen continuous growth, growing 86% and 70% since 1999.
- During the same period the proportionate value of the LA rent to the RP rent has increased from being 81% of the RP rents to 89%.
- LA rental agreements target 10 year minimum contracts in contrast to RP’s average terms of 6 to 12 months.
- This means that at just under an 11% discount to the RP market the LA rental market offers long term stable returns.
- Over the last 10 years, regional rents in England have grown on average 4.6% per year.
- In the last 2 years, 2012 and 2013, regional rents have grown by 6% on average.
- The difference between the lowest and highest regional rents has increased by over 17% in the same period.
- In 2004 the highest regional rent was just over 41% greater than the lowest regional value and as of 2013 the difference is over 48%.
- The annual % change in both the average rental price and the (Consumer Price Index – CPI) inflation rate has seen increasingly volatile fluctuations since 1999.
- Between 1999 and 2006, the standard deviation for the % change of the average rental price was 0.95% and for the CPI Inflation rate was 0.48%.
- Between 2007 and 2013, the standard deviations almost doubled, with the standard deviation of the average rental price growing to 1.9% and the CPI Inflation rate’s standard deviation growing to 0.83%.
- This increase in the volatility can be associated with the economic recession and the Company expects this volatility to continue in the short to medium term.
- 141,715 people with Learning Disabilities (“LD”) in England in 2011 – 80% were using LA funded services.
- 9.7% Adult Placements, 39.3 Residential Care, and 51% were living with Family.
- 29,000 people with LD were living with parents over 70.
- Figures expected to double by 2026.
- Each non-warden unit has an annual rental income of £7500.