NW 2013: House tricks

In association with MC2

MC2 There will be unprecedented changes in the housing sector in 2013 as we head into unchartered policy waters.

It is essential that the industry develops new ways of approaching the challenges in our sector if we are to continue providing housing and services that are fit for purpose.

One serious and much discussed issue is the impact of welfare reform on individual households and housing association finances. No one knows with any degree of certainty what the effects will be when this comes into force in April 2013 but some housing associations may not be as prepared as they thought. Rent could go unpaid as the introduction of Universal Credit means that tenants will be paid money for their rent directly rather than being transferred directly to the provider. In addition, the introduction of under occupancy charges means that some households will see further reductions in benefits and this will lower the demand for larger properties. There is also ultimately the chance of some high profile failures in the housing sector, and the only thing we know for sure is that housing will never be the same again.

Traditional financial tools no longer exist

In 2013, I expect to see an increasing number of developments delivered through pension funds, special purpose and other innovative funding vehicles. I believe we will also see an increase in housing associations building properties without subsidy for open market rent.

This last method in particular is dependant on achieving good rental yields, which is easier to realise in high value areas such as the South East. However, in lower value areas such as the North West there is a risk that we will see no new development for a good few years under this model, so funding vehicles and a proactive approach to asset management may be the best solution for the region.

The government wants housing associations to build their way out of recession but the traditional tools we had at our disposal, ie capital grants, cheap long term finance, cross subsidies from shared ownership and outright sales, either don't exist or aren't viable anymore. Faced with this, in addition to a backdrop of wider economic uncertainty, it is understandable that many in the sector are feeling wary about the future. However, there is still potential for success if the challenge is approached in the right way.

Ultimately, if housing associations continue to focus on the main priority – providing high quality homes and supportive services for their tenants – innovation will follow.

  • Brian Simpson, chief executive, Wirral Partnership Homes

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All agreed – the real key to innovation in the Sector being taking the shackles of endless – and often meaningless – bureaucracy and red tape in local government away so that some of the very professional and innovative individuals in Local Authorities can get on with working in Partnership with private sector organisations who have the vision and tenacity to deliver alternative housing models. In Cities such as Manchester and Liverpool the ‘will’ is there and progress is only thwarted by the inane restrictions of the bureaucrats.

By David Sleath