Tackling housing delivery with SME partnerships
Partnerships are vital within the Registered Provider (RP) sector to be able to deliver the required numbers of homes needs across the North West.
We know there’s a nationwide problem in the delivery of affordable homes and there’s been many articles and experts wading in on the debate over a long period of time, but there’s one approach which doesn’t always receive the publicity it perhaps deserves and that’s through strong partnerships and the role the SME market can play.
If SMEs can move light footedly enough across the sector in procurement terms (land), working with a solid supply chain base to be able to put all the disciplines that housing associations themselves don’t have internally together to be able to work alongside the delivery of much needed homes across the North West, we can start to make the impact that’s needed.
SMEs, like Lane End, have a purpose-built vehicle to supply the needs of the housing association in the procurement of land. From the appraisal of the procurement of land to the diligence that is needed to administer any risk out of the contract to enable the safe delivery of government grant funded housing.
This risk adverse approach ultimately delivers the output needed in the relevant timeframes for the housing associations. What’s required in the housing industry now is more affordable homes. There’s been a noticeable shift post August 2011 in the market since the then Chancellor, George Osborne’s announcement in a reduction in rent through a 1% income reduction.
We have seen a shift and more of a focus by some RPs in outright sale properties, which is now part and parcel of their delivery programme going forward.
I believe we are seeing more of an emphasis on what affordable is and it does pose the question; What does ‘affordable’ now mean? Today, affordable can be considered to range anything up to £600,000 houses with the assistance of the help to buy scheme and other products out there.
Given the current climate with Brexit, what are left with as nation is infrastructure and construction and we have a huge deficit in housing stock to service the numbers that require new homes.
It’s been highly publicised that the shortfall in the number of affordable houses is over 3.5 million – that is someway off target to where we need to be. If we couple that with the housing crisis then it’s a problem again. So, who is going to help solve the problem?
House builders are not going to do it – they are going to build up their own rate and return – as you will expect them to do.
Therefore, it is the SME market, in partnership with RPs where I believe is the starting point.
Let’s not forget, strong collaboration and working shoulder-to-shoulder allows both parties the line of sight. They know each other’s attributes and focus points to make a positive difference and significant impact to be able to come together and merge skill sets to be able to deliver these numbers needed. It is only going to happen through this sector. We see now a more encouraging developing picture for affordable homes from the RPs and that has to be a big plus point.
So, what does the future hold for RPs in this partnership?
I believe they are doing more commercial. Certain development companies are being setup by RPs so they can be commercial and in the other market place where they can take advantage of sales. It’s not just affordable where they operate – they can help with the housing crisis with some sales, but predominately keep their eligibility to build affordable homes. It makes them more diverse.
They are not just looking at sites for affordable. I predict we will see more of this – working alongside the SMEs who facilitates land, understand the planning process and all disciplines needed to get to planning and then undertake and deliver the construction to the finished article – a turn key approach.
Where we see the benefits of a solid partnership – writing from a SME point of view – is that we understand where our partners’ aspirations are geographically, tenure and numbers wise, and we task ourselves to deliver those opportunities. It takes the risk out the delivery but also allows them and us to help produce much needed homes that we know we are desperately short of in the UK.
This will be a year of change for the affordable housing market with many housing associations diversifying into outright sale to reinforce their managed stock.
With a myriad of change from Government policy, economic trends and Brexit, the traditional model of housing is being challenged more than ever.