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Social housing green paper: Housing associations must adapt to "new norm"

The social housing green paper has been criticised for failing to put centre stage substantial investment into the supply of social housing.

However, there are some positive ideas that go beyond the government’s existing commitment to allow social rents to increase by CPI + 1% to 2025, which might just help ease the current situation. 

• The aspiration to have more community led housing, especially as smaller developments are more palatable for local communities (the government has almost tripled the grant to £163m).

• Helping local authorities to build more by letting them borrow more; using their right to buy receipts more effectively and repealing legislation relating to higher value assets to allow local authorities to invest funds locally into more affordable housing.

• Longer term certainty over funding and recognising housing associations as an important partner in delivery. There may be some concern that funnelling large amounts of money into strategic partnerships with a few large housing associations will make it harder for locally based community associations to deliver bespoke products to meet acute local need on a small scale. However, the proposition of another Affordable Housing Guarantee Scheme will help smaller and medium sized providers to answer this need.

• A consultation on how local authorities allocate social housing, as this can be a complicated process leading to delays and empty properties, and reducing local authority and housing association revenues. 

• A recognition of the rise in social impact investors – albeit no word yet on what role if any the government might play.

Voluntary right to buy is back on the agenda – supported by a large pilot in the Midlands and £200m in funding. This could be good for tenants who want this option but could present a real challenge for associations at risk of losing large numbers of stock in areas where it will be difficult to replace units.

The difficulty in practice for those involved in the supply of social housing is the government's overall approach, which is to support the creation of several ways to fund social housing beyond just applying for grant through a single intermediary. This can be a lot more complicated, resulting in delays and increasing pressure on already limited resources.

Under the new approach, housing associations will need to consider what they want to do, where that money is going to come from, who to contact, the support needed and sometimes the reaction from residents to them spending vital resources on interest for loans versus building new houses. 

The green paper confirms that a diverse approach to funding is the "new norm" – housing associations must continue to adapt, up-skill, plan for what is needed and address the impact this approach will have on their business plans.

This article first appeared on 24housing. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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