“Transformational” funding announcement for social housing

Emma Richman, National Chair of Women in Property

WiP National Chair, Emma Richman, is Executive Director of Operations at Peaks & Plains Housing Trust. She also holds a board position with another housing association in the North West, is Vice Chair of the Building Safety panel, and sits on the Quality of Existing Homes panel at the National Housing Federation (NHF).  Her nearly 30 years’ experience in the sector makes her eminently qualified to comment on the Chancellor’s recent social housing and affordable homes funding announcement.

“Labour’s announcement of £39 billion into social and affordable housing is unprecedented.  It represents a massive increase on the budget set by the previous Government and is a tremendous boost for the sector.  Kate Henderson and her team at the NHF deserve recognition for this.  They have worked incredibly hard and, with the backing of Angela Rayner who grew up in social housing, the Government is now far better informed of the issues faced.

The money will be allocated through grants over the next ten years and, as we understand it, the spending will be more regionalised, via the devolved Local Authorities some of which are better established than others, notably Liverpool, Manchester and London.

Some clarification is still needed.  For example, will any of this budget be used for regeneration or just additionality?    Previously Homes England would only support new units, but this is a problem if, for example, five new houses are built to replace a block of 20 bedsits, when the numbers are reduced and funding is affected.  However, a lot of the older housing stock is not fit for purpose and often it is better to take them down and replace with new properties that are future-proofed, taking in all the environmental and community benefits available.  Much of this simply can’t be retrofitted in old stock, to a sustainable level.  Some of the new, bigger schemes are built using modular construction, which is fantastic as the more you can build, the greater value you will get.  It doesn’t currently give the same return for smaller schemes.

This is particularly important when you consider the demands placed on this sector – all with the best intentions but the pressure on social housing providers is enormous.  There are regulatory and safety requirements, Consumer Standards, Awaab’s Law, and residential rented property must reach EPC C by 2030.  To date, there hasn’t been the money available to implement these very important improvements, but they are critical, so the funding announcement is more than welcome.  

Another announcement that will be transformational for the sector is that, for decades, housing associations have suffered from rising costs, but they have had to accept a fixed, low rent.  We can now increase rent by 1% above inflation for the next ten years.  Housing associations work to 30-year business plans, so having this level of certainty for our financial projections gives certainty.  And like the rest of the property and construction industry, certainty is all important, allowing for investment and development in the homes most needed by some of the most disadvantaged in our society.

Rent convergence was also part of last week’s announcement.   Some housing associations have extremely low rents, compared with other locations, which puts them at a real disadvantage. 

The aim is to bring rents onto a level playing field, across geographical areas.  Levelling this out will be a great help to them, again giving confidence to the sector and its investors. 

Collectively, these measures should go a long way towards supporting the Government’s target of building 1.5 million new homes by 2029.”