A policy agenda centred around deficit reduction, localism and a big society demands radical thinking from housing associations. There should be a new contract with the government.
Our report, developed with PricewaterhouseCoopers, emphasises the need for housing associations to use their assets differently. Around £4 billion might be generated by a combination of a £1 a week increase in rents and £1 a week reduction in operating costs. Converting half of the rented stock vacated each year to intermediate rent could produce £3 billion in borrowing power. It should be possible to unlock some of the capacity tied up in historic grant too.
If housing associations commit to generating extra financial capacity and working with lower levels of housing grant and equity funding, the government should contract with them to offer programme certainty, greater availability of discounted publicly held land, a degree of rent and asset management flexibility, and a benefits system and regulatory environment that maintains lender confidence.
The government should also consider an additional form of rented tenancy - time-limited and specifically targeted at people on housing waiting lists in lower paid work. This would not affect tenure security in ‘standard’ social rented housing. But it would support aspiration, meet a gap in the market and generate more capacity.
After, say, five years, residents could use a deposit entitlement to move into shared or full ownership, intermediate market rent, or back down to a social rent if necessary.
Housing need does not respect public debt levels. In hard times housing providers must be more creative and flexible if the affordable housing we need is to be built.
David Montague is chief executive of London & Quadrant