Housing associations want to play a bigger role in delivering homes

June 29, 2018 / Isla MacFarlane
Housing associations want to play a bigger role in delivering homes

Those working in the affordable housing sector overwhelmingly believe it should be doing more to help solve the housing crisis by prioritising building more new homes to meet the growing needs of those unable to afford market housing, according to the 2018 Savills Housing Sector Survey.

Delivering more homes is the main priority

Almost two-thirds (64%) of 1,700 respondents who work in the sector believe their main priority is to deliver new homes, outnumbering those (36%) who say it is to manage existing stock by nearly 2:1.

Nonetheless, in the wake of the Grenfell Tower tragedy, fire safety has risen up the agenda for almost all housing associations (89%). Despite this, and the many challenges facing the sector, three-quarters of the housing association executives who were surveyed believe the development of new affordable homes is an increasing priority.

The sector remains true to its roots and unequivocal on the three groups it should be housing, namely: vulnerable households (88%), working households unable to afford to buy or rent in the open market (73%) and the homeless (67%).  The vast bulk of respondents believe the needs of these groups are increasing.

Housing need figures are undeniably stark. Savills estimates that sub-market rental homes represent a third – at least 100,000 homes per year – of all housing need.  Just 27,000 such homes were built in the 2016/17 financial year, all but 3,000 by housing associations, evidence of the massive contribution already made by a sector that houses over two million households.

Developing for a range of tenures with a renewed focus on social rent

Both policymakers and the wider housing sector recognise the need for homes to be built across a broad range of tenures in order to achieve additionality. This approach is feeding down to housing association chiefs with a recognition that they need to become developers themselves if they are to upscale.

The Savills survey, run in association with Social Housing magazine, probed associations on the type of homes they plan to deliver over the next five years. As in 2017, over eight in ten plan to build shared ownership and affordable rented homes. Six in 10 plan to build market sale homes, slightly below last year’s 66%, but there was a notable uptick – from 60% to 80% – in the number planning to build social rented homes.

Land availability the biggest constraint

There are barriers, of course, but the availability of land rather than government policy is the major constraint.  Last year 71% of respondents ranked government policy a top three barrier to building more homes, a figure that has fallen to just 24% given much greater certainty on rents and a noticeable change in political rhetoric.

By contrast, 86% of respondents now consider the availability of land a major issue (72% in 2017).  Over half (54%) state that more grant funding is required, while around a third (30%) cite construction industry capacity and organisational capacity.

Changes in approach required

To achieve growth ambitions, associations recognise the need for scale.  Around eight in 10 respondents expect to consider partnerships with other registered providers, local authorities and private developers over the next five years.  A significant minority (43%) expect to have to change their funding strategy or financial structure to deliver development aspirations.

Achieving a step change, Savills says, will require the sector to look beyond small sites and Section 106 homes, which will anyway continue to be limited by capacity in the housing market. Rather, they will need to acquire and develop large strategic sites if they are to fulfil their ambitions.

“Housing associations clearly have the ambition to respond to need and take advantage of the improving policy environment,” says Robert Grundy, head of housing at Savills. “To achieve a real uplift in the number of homes the sector can build requires a new hands on approach to planning and housing delivery.

“The housing delivery challenge is huge and the solution does not lie in doing more of the same thing.  Our survey tells us that the sector recognises the need for the right partnerships and financial structures, and collaboration with those public and private bodies that can unlock land and opportunities.”

Luke Cross, editor of Social Housing, said, “When you ask people why housing associations exist, the vast majority in our sector would put social purpose top of the list. But that’s not always the perception out there in the wider world.

“This research demonstrates the size of the responsibility on the shoulders of not-for profit providers, from the millions of families in the homes they own and manage, to the hundreds of thousands of homes they’re expected to build.

“Meeting all these needs requires further change from within the sector – but it can only really happen if government, funders and other partners are willing to play their part as enablers.”

Did you like this? Share it: