Thursday, 11 February 2016

Bright ideas

We all know the current problems - house building is at its lowest level since 1923; the number of first-time buyers has reduced to an all time low; and more than 4 million families are now registered on social housing waiting lists.

However, the future is less clear. The government is overhauling the funding and delivery of social housing, through the introduction of the affordable homes programme which runs until 2015.

Beyond that, what will the housing sector look like in five to 10 years’ time?

I believe we need to find many more funding solutions. We should do what works for each organisation, let’s be imaginative and put new investment models in place.

It’s a position Places for People has adopted over the past decade. We’ve raised more than £1 billion in private finance, compared with £405 million in government grant funding.

We’ve delivered more than 9,170 homes across the UK - 40 per cent outright property sales; with the remaining focused on market and social rent.

We’re not afraid to innovate. This year we launched a retail bond. This was a sector first and enabled individuals to directly invest in the association. The bond was heavily over-subscribed and we raised £140 million.

We believe we can do more. We have developed a solution that delivers 5,228 new, affordable, mixed-tenure homes over a 10-year-period without social housing grant.

Our approach is based upon levering equity investment into our company through a one-off re-designation of historic social housing grant, as equity.

Combined with increasing rents on 75 per cent of our void properties up to 80 per cent of market rent (depending on location), it would enable £750 million of equity and more than £340 million of debt funding to be raised to underpin a major development programme.

We know there is demand from institutional investors - not only will the homes help meet demand but they will sustain some 8,000 jobs in the construction sector.

Housing providers alone, with or without government grant, cannot deliver the level of finance necessary to meet current and future housing demand. We need the input of private finance and institutional funds.

This raises questions about regulation and governance. The housing sector needs to move towards a more sophisticated regulatory regime similar to the water industry and other utilities.

Let’s make regulation more appropriate to the level of performance the organisation is achieving - a ‘light touch’ for those which are deemed to be performing well and so posing a low risk.

These are exciting times for those willing to evolve and tackle what will be an increasingly complex future housing operating environment.

David Cowans is chief executive of Places for People. He will speak about the future for housing on 1 November at the International Housing Summit

Readers' comments (1)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up

Related

Articles

  • Looking on the bright side

    2 February 2016
  • Green goals

    16 February 2015

    The Green party recently promised to build 500,000 social rented homes by 2020 if it wins the next election. Housing spokesperson for the Greens Tom Chance explains more about his party’s bold pledge

  • Get behind Homes for Britain

    13/02/2015

    Housing is firmly on the agenda of all three main political parties

  • A problem shared

    11 February 2015

    Rewrite the shared ownership rulebook. That is the advice from Savills’ Mervyn Jones to combat the problem of unaffordability of the product in central London

  • In a pickle

    11 February 2015

    Eric Pickles has been told his policy of calling in all planning applications for Gypsy and Traveller sites on the green belt was discriminatory. Marc Willers considers the implications

IH Subscription