Blog: Study the market, get the skills
Bathgate-based Weslo Housing Management was among the first Scottish social landlords to branch out into the private rented housing sector. In this guest blog for CIH Scotland, Weslo chief executive Mike Bruce offers some words of wisdom for others who are considering crossing the divide to meet the growing demand from this emergent market.
First and foremost, social landlords looking to move into the private rented sector need to study their market very carefully. Markets vary from area to area – rural, semi-rural or cities – and different dynamics will apply in different areas. In the cities for instance, Edinburgh or Glasgow, say, there are already many big operators and the aspiring RSL needs to be sure about where it will fit.
We looked at the market in our home territory of West Lothian and felt that, for the provision of mid-market and market rents, i.e. off the shelf purchases, there was definitely a demand we could meet, which would allow us to offer the expertise and reputation that we have built up in the social rented sector, to the increasingly complex private rented sector.
As our plans progressed and our presence grew, we encountered many private landlords who were viewing the changing legislative and regulatory landscape with concern. Concern at the potential expense of compliance, and concern at their ability to keep up with it all. Significant numbers were looking to either get out of the sector or work with specialist agencies.
To accommodate that demand we altered our offer to include that of the specialist lettings agency. We’re already in the business of social housing, used to working in a tight regulatory and legislative regime, so we’re now offering agency services in the private housing sector through the offices of our subsidiary company, trading as Weslo Property Management.
We recruited a Head of Residential Services to lead on our private rented sector activities and she’s been extremely active in establishing us in the local market and growing the business. To date we have some 30 individual landlords as clients, managing some 90-odd properties on their behalf.
As well as studying the market and identifying your strategy, you also of course, need to make sure you have the right skills in place. Although it’s still housing, it is a very different market.
Originally we felt that we could bolt on the private rented housing to the portfolios of our existing housing officers. But as our activities in the sector progressed we realised we would be needing additional skills to better operate in the new and changing environment we were entering. It is a totally different legislative environment – with different tenancy agreements and legal remedies for instance – where the needs and expectations of the tenants can be markedly different from those we were used to in the social sector.
It’s been an interesting journey and one that we’re very much excited about as we play our part in helping to achieve the Scottish Government’s goal of creating a better more professional private rented sector.