Private sales no longer able to support social home building
Model is broken say mega-associations
UK housing policy is ‘broken’ and will not deliver the number of social homes the government wants, some of the country’s most powerful housing associations have warned.
The Volume Developers Group, which includes mega-associations London & Quadrant and Riverside, is lobbying the government for revolutionary changes to end their dependence on the crashing property market. Backed by the G15 group of London’s largest associations, the landlords have warned the government they are no longer able to subsidise social housing development by selling private and shared ownership homes.
Writing in this week’s Inside Housing on behalf of both groups, L&Q Group chief executive David Montague calls for a ‘fourth way’ – beyond the ‘third way’ of public-private partnership that housing associations have embodied for many years. This would involve bringing forward the entire unspent affordable housing budget for the next three years. Until private lenders regained confidence, the government would be the main source of associations’ development cash, providing a combination of grants and equity investment.
Mr Montague admitted this plan would mean fewer homes for the money. But he added: ‘Nothing is going to be built under the current model. The current model is broken.
’L&Q was not planning to build any new homes for private sale in the next 18 months, Mr Montague said.
Keith Exford, chief executive of Affinity Sutton, said the government would ‘unequivocally’ fail to meet its social housing targets in the next three years with current resources. ‘We typically build about 1,000 homes a year. We will not be building this many homes next year because that can’t be sustained without profits from sales.
’Sir Bob Kerslake, chief executive designate of the Homes and Communities Agency, said: ‘We wouldn’t rule out bids without cross-subsidy, but would look for a range of proposals to come forward.