Large association stops building cheap rented homes
A major London housing association has ditched affordable and social rent from its development plans, in a response to George Osborne’s ‘watershed’ budget.
Source: Jonathan Goldberg
Genesis Housing Association has revealed it will now build only for shared ownership, market rent and outright sale after concluding that the government is ‘no longer interested’ in low-cost rented housing.
The Budget introduced measures to reduce social housing rents, alongside the planned Right to Buy extension and a forthcoming ‘refocusing’ of government housing budgets towards homeownership products.
Neil Hadden, chief executive of Genesis, said: “We are not able, or being asked, to provide affordable and social rented accommodation to people who should be looking to the market to solve their own problems. I do think [the Budget] is a watershed in all sorts of ways.”
The 33,000-home landlord will also review its general needs rented accommodation as it becomes vacant – with a view to selling it or changing its tenure. It comes as other landlords consider developing more shared ownership in place of cheap rental products, although none have yet gone as far as Genesis in ruling out new sub-market rented homes.
Genesis was aiming for a third of its development programme to be for market rent and sale, a third for shared ownership and a third for affordable and social rent. It will now aim for a 50/50 split between shared ownership and market products.
“I also happen to believe that this government is not particularly interested in producing affordable rented accommodation… and I think that’s a big paradigm shift,” Mr Hadden added.
The landlord plans to negotiate with the Greater London Authority (GLA) over schemes it has committed to under the 2015/18 Affordable Homes Programme.
Paul Phillips, finance director at Notting Hill Housing – another large London landlord – added: “The options [for us] are to reduce the development programme, or reprofile it away from affordable rent and towards shared ownership.”
He said this would not mean an immediate end to developing for affordable rent. Other landlords have told Inside Housing they are considering increasing shared ownership provision.
But Tony Stacey, chief executive of South Yorkshire Housing Association and chair of Placeshapers, said: “It depends what you’re about as an organisation, and it depends on your ethics as an organisation… I would be very, very surprised if any Placeshapers members took that view.”
Click here to read the full interview with Mr Hadden.