Enfield launches property company to help tackle homelessness

London Borough of Enfield has voted to establish a council-owned company to acquire a portfolio of homes to accommodate residents at risk of homelessness.
At a meeting last week, the council’s cabinet agreed plans drawn up in conjunction with social investment firm Social Finance.
The new company is being created in order to reduce pressures on the council’s temporary accommodation budget, which it says could rise to up to £7.8 million in 2014/15.
A report by council officers said: “Detailed work has been undertaken to review the housing market in Enfield and to create a financial model that captures the income and expenditure required to develop and maintain a property portfolio.
“The framework of investment has been reviewed in the selection of the most appropriate option for this project and it is proposed that the council purchases properties on the open market, renovates them and transfers them to a local authority company to own and manage.”
The council proposes to use Public Works Loan Board (PWLB) funding or external finance to purchase properties, although it could use funding to build new homes in the future.
It is planning a phased approach to the purchase of housing in order to manage risk and test the effectiveness of the model.
Enfield will provide a start-up loan to meet the initial costs from its general fund, which will be recovered throughout the term of the nomination agreement.
The council will retain full control of the company along with the allocations, selection of properties and the rent.
This structure will give the council full flexibility to set an appropriate rent for the target population which will be similar to Local Housing Allowance rates.
Because the company will be wholly council-owned and provide services exclusively to the council, it benefits from the Teckal Exemption, which means that a procurement procedure is not necessary.
As the properties will be owned by the company, they will not be eligible for Right to Buy.
The creation of the company is a result of work undertaken with Social Finance, which was appointed by the Department of Communities and Local Government to develop an institutional investment model with the aim of substantially increasing the supply of long-term private rented accommodation for homeless households.
In September 2013, Enfield was ranked seventh highest nationally for the number of households in temporary accommodation.
At the end of December 2013 there were 2,188 households in temporary accommodation, most of which are housed in the private rented sector.