Social Housing Speed Read – a new direction by Government?

What direction is the Government looking to take?

Over the past few weeks, there has been a change in the Government’s focus from home ownership to increasing the overall supply of all forms of tenure, which culminated in the announcement of several new policies at the Conservative Party conference.

Indeed the Government has previously come under a lot of criticism and pressure from the sector to abandon their year-long focus on home ownership, with some commentators describing it as being “destructive for the long-term supply of housing”.

They will certainly view these latest developments as encouraging and are likely to offer their support in the implementation of such policies. However, the Government’s previous calls for provider participation particularly in relation to increasing housebuilding have been seen to be ‘risky’ by some sector commentators. Despite these concerns the sector has been quick to voice its support of the Government’s latest approach and the new policies.

Have these new policies had any effect?

So far the Government’s new policies have yet to have any real effect or in some cases to be confirmed, for example how the Shared Ownership and Affordable Homes Schemes will be modified in order to increase the overall number of affordable rental properties. Yet this is understandable given the party conference only took place earlier this month.

In addition to the new policies, some providers are looking to sell selected stock due to their location, condition or low demand as part of their business plans to increase the cost effectiveness of their asset management. Indeed many providers have reported marked increased sales of social rented homes over the past year when compared with 2015.

This may be one way in which to help ease the housing shortage, however it has been commented that this strategy could damage the sector’s reputation, particularly where these properties are inhabited.

The National Housing Federation, however, has confirmed its support for this strategy as in its view it enables the sector to “generate profits…to reinvest into building new homes for rent as well as continuing to improve the already high quality of their existing stock”.

Whilst the sale of stock is certainly one way in which the sector can help the Government to reduce the housing shortage, it is an approach which needs to be managed carefully, given the potential reputational effect and it must be in conjunction with other schemes.

What other innovative solutions could the sector provide?

Even with the reservations regarding increased sales of social housing stock, the National Housing Federation has indicated it will be actively promoting the state-funded “buy as you go homes” in its submission to Phillip Hammond and requesting its inclusion in the Government’s Autumn Statement.

If successful, this will allow buyers on low incomes to secure a share in a home without having a deposit or mortgage. This will be achieved using an equity product which is currently under development.

There has already been some interest from the Government as to this product’s potential appeal to those people who are struggling or ‘only just’ managing as they were specifically targeted at the party conference. Just whether the National Housing Federation will be successful in their campaign remains to be seen and we await the publication of the Autumn Statement.

From these latest developments, it looks as though the Government will be looking for both the support and participation of the sector to help reduce the housing shortage, a view which seems to be supported by the National Housing Federation’s latest proposals.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.