Landlords urged to build through the downturn
The chair of the Homes and Communities Agency regulation committee has told the sector not to ‘hunker down and do nothing’ in the face of a challenging economic climate.
Speaking at a breakfast event organised by Wates Living Space and Inside Housing this morning Julian Ashby said the housing sector was entering into a ‘period of significantly higher risk’, but that landlords should still be developing new homes.
‘We are very keen that you are active in new supply, but we want you to be quite careful in how you manage the risks at the same time. It is a new and dangerous environment but we don’t want you to hunker down and do nothing,’ he said.
Mr Ashby said that the combination of housing revenue account reform, welfare reform, the end of long term bank lending and the end of grants for development meant landlords were facing challenges to make development viable.
However, he said the sector should continue to try to finance new supply.
The regulatory chair also said the HCA would be taking a back seat in helping landlords deal with financial risks.
‘We want you to manage the risks that affect you and do that as well as possible so we don’t have to get involved,’ he said. ‘The certainty of the last 25 years has been shaken and there are a lot of different things that are now very new and very different to what they were before.
‘You are all different and the way those risks affect you are very different as a consequence.’
Steve Trusler, strategy director at Wates Living Space, said the private sector was also having to find ways of managing risk in the face of new housing policy environment. He said the company was looking at opportunities in the private rented sector.
‘Some of the old ways of creating housing don’t work anymore and won’t work in the future. From Wates’ point of view we are having debates about what we can do about this. We are looking at what risks we can take on board and what investment we could make,’ he said.