NOTE: This content is old - Published: Friday, Oct 19th, 2018.
A council-run housing company is set to pull out of providing managed lettings because of ‘financial challenges’.
North East Wales Homes (NEW Homes) was set up by Flintshire Council in 2014 to increase the amount of affordable housing across the county.
The scheme currently manages 25 properties on behalf of landlords.
However, now its directors are proposing to stop as the service has only generated around £20,000, compared to annual costs of over £73,000.
In a report Neal Cockerton, the authority’s chief officer for housing, said: “The challenge for this scheme is that properties are not let at market prices so the rental income is lower.
“In order to be competitive and attract landlords, the management fee must be lower than high street agents.
“Therefore, the council is taking a lower percentage management fee from a lower rent income and is unable to maximize fees and charges to either tenant or landlord.
“This makes available much needed affordable and well managed properties in the county, but presents considerable challenges financially.”
He added that the introduction of the Rent Smart Wales scheme by the Welsh Government had further reduced the number of landlords wanting to work with NEW Homes.
The company is also planning to pull out of a scheme for people aged over 55, which involves leasing their houses to allow them to access more suitable sheltered housing.
Their homes are then made available at an affordable rent for residents.
But Mr Cockerton said there had been a low uptake for the initiative with only two properties currently involved.
He said: “The over 55 scheme has had a low take up but appears to have taken a disproportionate level of staff time.
“More recently, NEW Homes has undertaken negotiations with the council to enable a sensitive withdrawal from these schemes, which does not place unnecessary hardship upon either the landlord or the tenants of these properties.
“NEW Homes will still work with all of its existing landlords and continue to provide the current level of service, until alternative landlord arrangements are confirmed.
“In terms of the two over 55 properties, due to the vulnerability of the tenants, it is proposed that these will be retained with in the council and managed through our housing options team as part of the temporary accommodation service.”
Members of Flintshire Council’s cabinet will be asked to approve the withdrawal of the two services at a meeting next Tuesday.
They are also being recommended to approve finding an alternative for the managed lettings scheme within the private rental sector.
By Liam Randall – Local Democracy Reporter.