NW 2013: Golden green
If 2012 was the year in which we saw the roots of change in the social housing and regeneration sectors, then 2013 is when we'll begin to see tangible effects on the ground through the Green Deal and Energy Company Obligation initiatives.
Taken together these are two transformative programmes that will shape retrofit work in the affordable homes market as much as the landmark Decent Homes investment programme.
ECO formally launches this December while the Green Deal, after its soft launch in October, will go full scale in January.
The Green Deal is the Coalition's flagship policy to improve the energy efficiency of domestic and non-domestic properties. The new financial mechanism eliminates the need to pay upfront for energy efficiency measures and instead provides reassurances that the cost of the measures should be covered by savings on the electricity bill, the so-called Golden Rule.
ECO will take over from the existing commitments of the energy giants through the Carbon Emissions Reduction Target and the Community Energy Saving Programme.
Both the Green Deal and ECO will redirect millions of pounds from Government and the energy sector into the social housing market in the North West over the next few years.
In the new build market, issues surrounding funding will move ever closer to the fore next year as another 12 months will have passed us by in which the amount of new affordable homes we need to build to sustain demand is once again not met.
Again, this year we saw the foundations being laid for significant changes. In April the Government fundamentally altered the way it local authorities can manage their funds for housing.
All municipal authorities are now allocated a pot of cash for housing by central government for the year, with any surplus they collect being theirs to re-invest into their stock, whether it be for improvements or for new build schemes.
By April 2013, those councils which have managed to balance the books – or better yet, achieve surplus – will be in a position to direct more cash into social housing.
We can also expect to see newer sources of finance entering the sector driven by declining returns on commercial real estate and the on-going turbulence of the global stock markets.
Many funds – particularly those investing pensions – are looking ever more favourably upon the social housing market.
The growth of the social housing real estate investment trust market will no doubt also be a key development in the sector.
In November, Houses4Homes said it intended to become a REIT by floating on the Alternative Investment Market in a bid to raise £700m to invest in desperately needed social housing. Meanwhile, rumours abound about other asset managers scoping out further large investments in the sector.
With Government grants slashed and showing no sign of returning within the next five years, and the banks still highly reticent to lend, the Green Deal, ECO and alternative funding streams will provide welcome news to the social housing sector in 2013.
- Lee McCarren, chief executive, Forrest
