by Rachel Fisher, Head of Policy, National Housing Federation
It is a truth universally acknowledged that a country in possession of a growing population and a strong economy must be gripped by a housing crisis. And so it is in England.
There is (finally) recognition from the highest levels in government that the housing market is failing people. Failing ordinary people who work hard but never the less are in low paid or insecure work. Failing families trapped in an expensive and uncertain private rental sector. Failing older people who lack the personal wealth to provide for their own care and support.
The housing crisis is reflected in both rising house prices pushing people further away from a dream of home ownership – but also, more worryingly, in a rising housing benefit bill that continues to rise with a staggering £9bn a year going to unregulated private sector landlords.
There is a solution to the housing crisis. When asked, politicians and opinion formers across the political spectrum view housing associations as critical partner on delivering new supply in order to make homes more accessible and affordable. Not only are housing associations key to delivering the new supply the country desperately needs, but their track record as delivering a high quality landlord service is also fundamental to ensuring that everyone has a place to live that they can depend on.
In 2015 the Government committed to delivering 1 million housing starts by the end of the parliament. The sector believes that with the right conditions we can deliver about a third of that target. Ambitious, yes. But not unrealistic - this is in line with the commitments we had already made in Ambition to Deliver of delivering 120,000 homes a year by 2035/36 across all tenures.
In order to achieve this goal the sector needs to increase supply by 5.8% per year.
New homes built by housing associations: 120,000 by 2035/36
As shown in the graph above in 2015/16 the sector delivered about 40,000 homes. Of those homes 43% were delivered outside the Affordable Homes Programme, and more Social Rented homes were delivered outside the programme than within it.
These are challenging times. The challenges to housing associations have been well rehearsed. The vote to leave the European Union has, in particular, caused significant uncertainty and anxiety in the housing market. There is a significant risk that there will be a reduction in developer appetite. In such times just staying still is an accomplishment, and yet all signs point to associations increasing their appetite to deliver new homes. In the first quarter of 2016/17 the sector completed 7,500 homes and started 10,000 homes.
So what can be done to ensure that associations continue to deliver on their ambitions? Of course there is a job for Government. We need to have the right conditions for development. Broadly this can be summed up as:
- a flexible approach to Government investment which focusses more on numbers than tenure
- access to land at either free of discounted prices to provide associations with the cross subsidy necessary to ensure delivery of affordable homes
- planning certainty through permission in principle, s106 or other mechanisms to enable associations to deliver affordable housing.
But there are also things that associations can do now which would help them build more, the most important of which is collaboration. Associations have huge expertise and resources, but every associations is different, therefore it makes sense for them to partner with one another; whether even informally as part of a peer to peer network or more formally through a joint venture like L&Q and Trafford Housing’s recent announcement.
The sector can also work together to identify ‘bright spots’ where associations are successfully challenging the status quo, creating an environment where new ideas can be nurtured and developed. We will be working closely with members over the coming months on these different areas. The Federation is committed to making the case to Government, both central and local for housing associations’ position in delivering new homes. We know that housing associations are at the heart of ending the housing crisis. They deliver where the private sector won’t and the public sector can’t. And yet they are fundamental partners of both. Delivering affordable housing through section 106 planning obligations alongside the private sector, and through joint ventures with the public sector.
We know what the problem is and are taking steps to address it but with the right approach form the sector and Government we could do even more to achieve our ambitions to build the homes the country needs.