Our recent Affordable Housing Summit events in London and Manchester focused on the political landscape of housing in 2024, as we head towards a general election. With thanks to our panellists below are some key takeaways from the events.
The political outlook for housing in 2024 and beyond
- The single most important ask of any new government must be one of policy stability, with a long term rent settlement and, ideally, a grant settlement covering the same period.
- There is a strong case that housing associations need to make their case as part of a "joined up" approach to Government from the housing industry at large; there is a shortage of new supply across all tenures and the advancement of affordable housing forms part of a jigsaw of unlocking larger sites alongside other tenures, so the conversation with government shouldn’t be about affordable housing in isolation.
- The sector can expect the focus from a Labour administration to be on development for Social Rent; that needs to be tempered against the fact that may reduce output (because of the higher capital subsidy required).
- There is a compelling case for Treasury to see housing as a social investment rather than as revenue spend, and a strong case to returning to the Government supporting investment in homes rather than paying ever increasing amounts of housing benefit.
- Devolution (especially within those more established combined authority regions with single settlements) helps support local decision making and encourages delivery and meaningful regeneration.
- Drastic action is required to provide housing accommodation for rough sleepers and those living in temporary accommodation.
Funding development differently
- Availability of debt finance is not a significant issue, and it has been positive to see increased capital markets activity – the key issue is how sustainable it is to continue to load balance sheets with the debt needed for development (as well as investment in existing homes / retrofit etc.) and balancing this with the maintenance of credit quality.
- The consensus was that debt probably cannot continue to be the whole answer. There are alternative options available to generate income, but these will only make a significant difference if done at scale and the returns need to marry up on all sides.
- The for profit sector can offer alternative capital approaches bringing together not for profits and for profits where there is a combined ambition to deliver more homes – combining different sources of capital and also skills. Some of the options that have been seen to date are: development of homes by a for profit but management by a not-for-profit, for-profit leases homes to a not-for-profit, sale of assets to a for-profit by a not-for-profit (whether that's an external for profit or one that sits in the same group structure as the not-for-profit), joint ventures between for profits and not-for-profit organisations.
- There is also a growing acknowledgment of the potential for for-profits and not-for-profits to collaborate in relation to decarbonisation programmes.
Consumer standards
- The consumer standards will encourage RPs to focus on the safety of the tenants first.
- Many RPs have established Tenant Engagement Committees as a first step towards meaningfully capturing the views of customers; however, other governance solutions are evolving.
- The role of data is critical to understanding the "personas" and "wants" of customers; however, one of the biggest challenges faced by RPs is their ability to access this information from the many different IT systems operated.
- The consumer standards are a paradigm shift, requiring a structural change to be embedded within the sector.
Development and regeneration – the journey to 1.5 million homes
- A solution is needed to get S106 delivery back on track – private housebuilders have delivered just under 50% of the affordable homes over the last 10 years - a huge part of the supply, that can’t be allowed to fall away. Flexibility on grant application and tenure flex need to be considered, together potentially, with more innovative options, such as looking at how
- Homes England (or other) could act as aggregator. But private housebuilders must build quality homes.
Homes England are keen to stress their wider powers and ability to help catalyse home delivery, for example land banks, CPO, land assembly and enabling, funding expertise as well as the Affordable Homes Grant Programme. - The focus should be about "whole place" delivery. Homes in isolation are not the answer, but need to be a part of place based delivery. There needs to be more thought given to the interplay between commercial and housing, bringing high streets back into use, and demonstrating the strong interplay between housing and the wider economic and social benefits.
- The delivery challenge is a national one but supply chain issues, land costs, high rise complexities make the struggle more acute in the South East.
- Planning reform is needed – widespread frustration at the time and inconsistency of the planning process.
- The sector collectively needs to 'make a noise', to raise housing up the political agenda. Until housing is seen on the same platform as health and education, it will struggle to deliver. If the sector can better demonstrate and there is acceptance of the interaction between housing, health, education and indeed wider political challenges such as immigration, then homes delivery ought to follow.
