Housing consultant Anna Evans outlines what can be learned by the work of housing associations in the mid market rent sector.

The role of social landlords in the mid market rent (MMR) sector is now well established, but a number of RSLs are extending their role beyond MMR to mainstream PRS to complement their other products and offer a social ethos to the PRS.

But what are the lessons learned so far about MMR? Our recent research for the CIH / Wheatley Group shows that supply so far has been driven by eligibility rules and income thresholds which means focusing on couples, single people, and 2 bed flats. Consumers, developers and demand estimates suggest there could be significant demand for MMR for families in certain markets, but minimum and maximum income thresholds can act as a barrier to supply family sized MMR. The market for MMR for older people is less clear, and the research suggests this client group is more likely to be aligned to equity release products - shared equity and shared ownership, especially RTB owners looking to downsize to more suitable accommodation to meet their needs.

From the consumer perspective, we found amongst current MMR tenants that they ‘felt lucky’ to have stumbled across MMR as a housing option, and amongst consumers in general there is very little awareness of MMR. The key attraction to MMR from consumers is quality rented housing for working people. But the choice of MMR is not necessarily about the cheapest, or most affordable option - people are making value for money judgements around quality and price compared to mainstream PRS. Perceived security of tenure is key, based on ‘institutional’ security of tenure. Half of MMR renters see this as their long-term home, and half as a stepping stone to ownership later, confirming the potential MMR rent to buy market. Most MMR tenants are coming from PRS, and they demand PRS service approaches – more virtual, more responsive and flexible, and out of working hour services. Many RSLs have found there is a significant learning curve in moving from SRS to MMR, recognising that different skills, service culture, and often different people are needed.

This links to the increasing interest from RSLs and their subsidiaries to use this experience to the PRS. Shelter’s and Crisis’s interest in social models of letting agencies point to the potential match between RSLs’ social ethos and providing high quality services in the mainstream letting agency market. Weslo Property Management is well established in this market, but others are also developing services here to complement their SRS products including CydeValley Property Services, Places for People Scotland which is in the process of acquiring the Agnus Hunter portfolio in Edinburgh, and several Glasgow community based RSLs.

‘Housing Need and Aspirations: The Role of Mid Market Rent, Anna Evans Housing Consultancy publication pending, CIH and Wheatley Group, 2017.

Social Models of Letting Agencies and the Letting Agency Plus Model, research and consultancy by Anna Evans Housing Consultancy 2015 and 2016 for Shelter Scotland.

Anna Evans will be speaking on this topic at CIH Scotland’s event on ‘Beyond the Basics: more than just a landlord?’ on 30 November at the Mercure Glasgow.

For more details on the event click here.