Expert predicts more 'Ujima-style' failures
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Two housing associations are likely go bust in the next 12 months in ‘Ujima-style circumstances’, the chief executive of the Housing Finance Corporation has warned.
The head of the specialist lender, Piers Williamson, said there would probably be ‘quite a lot of sweeping up’ of failing housing associations into larger groups, but two associations could fold entirely.
Speaking at the National Housing Federation’s annual conference last week, he said the sector’s reputation with banks was at risk if housing associations did not manage their assets properly and stop relying on property sales.
He suggested rent-to-buy schemes could be the way to avoid financial disaster for many associations.
‘Most of the recent failures have been about daft development – over development in a good market. Here we have an abysmal market and I think there will be failures,’ he said. ‘I think there will be two in the next 12 months, which we don’t want to see but it is realistic.’
When challenged later that this was a conservative estimate, he said pre-emptive mergers could also happen as well as overt failures.
Ujima became the first housing association in England to fold earlier this year, and was taken over by London & Quadrant.
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Readers' comments (1)
Peter | 23/09/2008 9:42 pm
Social Housing is all about affordable rent for a decent home and not property speculation on the money markets. If HAs want to pursue that kind of business get out of social housing.
It is no good blaming the banks and the markets for these 'overt failures'! If one had carefully studied at the economic trends since 1979, the boom and bust cycle is ever present and not disappeared as most our political masters lead us to believe.
Finally, what happened with the risk management policies? Why are you up the creek without a paddle?
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