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Council lettings agency loses £53,000 a year managing just 25 homes

A council-run lettings agency looks likely to be scrapped after it apparently lost some £53,000 - even though it manages only 25 properties on behalf of landlords.

The Leader Live news website says North East Wales Homes - also known as NEW Homes - was set up by Flintshire Council in 2014 and now manages just 25 properties on behalf of landlords.

However, at a meeting today the council is expected to scrap the agency as it has only generated around £20,000 compared to annual costs of over £73,000.

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In the report Neal Cockerton, the council’s chief officer for housing, says: “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.”

Ironically, Cockerton says that the introduction of Rent Smart Wales by the Welsh Government had 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.

At a meeting today, councillors are being recommended to approve finding an alternative for the managed lettings scheme within the private rental sector.

Poll: Should councils ever try to run private lettings agencies?

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