Saturday, 30 May 2015

Trade on your assets

Would taking a long-term view be the best solution to fix the short-term lack of investment in housing? The Housing Forum’s latest bulletin At the heart is housing - making affordable rent happen, published last week certainly argues that it would. Drawing on the views of many leading public, not-for-profit and private sector organisations, the report gives a clear perspective of how housing associations might develop in the future.

Building for affordable rent does more than provide rented homes using less subsidy, it comes with greater financial obligations for housing associations and to meet these, greater commerciality must run alongside the traditional social housing business.

While banks have seen the sector as safe, they are increasingly looking to lend short term. Perversely, there is an increased cost of borrowing despite the lowest interest rates for many years. Alternative plans for investment with other institutions over a longer time span, using leaseback arrangements for periods of 30 to 50 years, can produce a major capital receipt.

The sector is and needs to explore new innovative forms of funding, building on the experience of some in the capital markets and the recent leasing transaction in which Aviva funded the £45 million transfer of 839 properties from Home Group to Derwent Living (Inside Housing,
13 September).

Having raised funding, a housing association could then build a much wider range of homes - some for rent and some for sale. The association’s housing stock would need to maintain value over this time period, requiring a commercial approach to asset management of their property portfolio.

Offering housing services to other organisations is another way of diversifying. For example, providing locally based maintenance services to other housing associations is one way, but why not offer more services direct to the local council? Property management and environmental services could be a start.

Building or buying homes to rent into the private rented sector can offer accessibility and choice backed up by the reputation and visibility of a housing association landlord. Where there is a substantial local presence, a housing association could offer a cost effective management service for private landlords and contribute to balanced communities.

Modernising our housing services must become a priority - a ‘market- led’ approach means operating viewing and tenancy services at evenings and weekends, for example.

Protecting the value of a home as an asset for the landlord will be a high priority so that housing associations can expand, and the growth of a landlord’s business is one way to ensure we can continue to build affordable homes for those who will need them in the future.

Shelagh Grant is chief executive of the Housing Forum

Readers' comments

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

  • Tale of two assets

    10 March 2015

    The NHS is a national asset - just as social housing is - and landlords can play their part in treasuring it, says Tony Stacey

  • HCA concerned about association's ability to protect social assets

    28 January 2015

    The Homes and Communities Agency (HCA) has warned that it lacks assurance that a Sunderland-based housing association can fully protect its social housing assets in the face of commercial risk.

  • Appreciating your assets

    21 November 2014

    The Homes and Communities Agency has been critical of the quality of landlords’ data. So how should they maintain the perfect asset register? Our experts reveal five steps to success

  • Councils to redevelop £13.5bn of assets

    17 September 2014

    Councils in England plan to redevelop £13.5bn of their assets over the next five years which should help to create more housing, a thinktank report has found.

  • 'Visionary' trade body CEO to step down

    11 September 2014

    The chief executive for the UK Green Building Council, Paul King, has announced he will be stepping down.

Resources

  • Trade secrets

    13/06/2014

    Can learning from other sectors help social landlords do their jobs better? Heather Spurr visits retail icon John Lewis with a number of landlords to find out

IH Subscription