Mark shares his thoughts on affordable housing focusing on Riverside’s achievements over the last 12 months, the challenges of welfare reform, right to buy and rent constraints and how we move forward with a new government, in their quest to build more homes.
Looking back it’s been a great year for Riverside in achieving our targets for the development of new homes, as we contribute to dealing with the housing crisis. We have made good progress in delivering our three year development programme, and starting on site with the Hull Extra Care PFI has been a particular highlight.
And behind the headlines some important milestones have been achieved. We have increased the proportion of homes built for shared ownership, helping the financial outcome of the programme and diversifying our customer base. Riverside Care and Support have set out their vision to create more mixed tenure/dependency communities and by sticking to these principles have secured funding for a new scheme in Rochdale.
But as we look forward, navigating through the challenging seas of welfare reform and rent constraint will be very testing. The voluntary deal negotiated over the right to buy has helped provide a more palatable proposal, and by piloting this we will be well placed to plan for the replacement challenge. The Government’s intent to invest more money to build more homes announced in the spending review in housing was a surprise, creating challenges and opportunities for Riverside.
The Autumn Statement (2015) clearly confirmed an absolute commitment to increasing home ownership. Grant available for housing associations to fund new affordable rented homes will be severely constrained. At least the voluntary deal on the right to buy looks set to ensure we will get full compensation for the sale of our homes to tenants, which will enable us to build new homes through a financially sustainable replacement programme. If we can get the right flexibility on how receipts can be used, this could also help in densifying Riverside’s footprint creating efficiencies.
The commitment to build 200,000 Starter Homes is the hardest impact to predict and raises questions. Is it the perfect answer to making home ownership truly affordable or an unattractive option for developers without greater subsidy? And is this a truly affordable housing tenure that housing associations should champion? What is clear is that this new tenure has created short term uncertainty over planning applications. There is also a significant concern that this will crowd out other affordable housing tenures.
Riverside is well placed to take advantage of the increased financial commitment to Shared Ownership, however we will need to manage our total market exposure through Compendium, Prospect and Riverside to different home ownership tenures.
Elsewhere the NHS is making the right noises about subsidising new homes to support primary care, reducing the pressure on acute care. No other housing association is better placed to make this work. However the theory, though sound, may raise concern that short term decisions will concentrate on symptoms rather than causes of hospital spending. The biggest current threat to supported and older persons housing, is the proposed restriction of affordable rents to Local Housing Allowance levels. The sector will have to lobby hard to help the Government understand the catastrophic consequences this could have on Supported Housing.
Perhaps the main positive to take out of the current direction of travel is that there is a high political profile for housing and it is difficult to see more homes being built without housing associations playing a major role. If the sector needs to be seen as a valued partner and part of the solution by Government, we can hopefully build a more stable foundation upon which we can plan our future.