Housing associations may stop building
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Housing associations need to develop new business models or give up and let councils recover the reins of social housing development, the chief executive of L&Q Group said this week.
David Montague told the Chartered Institute of Housing’s south east conference that associations had become dependent on property sales in a booming market to drive down the cost of social housing. That model had been wrecked by the collapse of the UK’s housing market.
‘We are seeing the resources we had available previously for new development being diverted to manage the risk in our existing pipeline,’ he said.
‘The sector is now at a crossroads, and the choice we have is either to throw in the towel and let local authorities pick it up, and get back into house building, or to take responsibility for shaping our future.
‘Within L&Q we’re planning for a future with less - possibly no - grant, because whoever the next government is, my guess is there’s not going to be much in the way of public investment.’
Councils are ‘sitting on a significant amount of land’, have a strong desire to get back into building, and have the support of government to do so, he told delegates.
But he said he believed what government wanted was a ‘mixed economy’ of affordable housing provision.
‘I think the future is more about new partnerships - partnerships between local authorities, housing associations and house builders,’ he said.
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