First it was the housing association funding model that was broken - now it looks like the rescue model could be too.
Not for hire
Inside Housing reports this week that Affinity Sutton had to pull out of a deal to rescue a struggling association because one of its banks said it would mean renegotiating its own lending terms.
That threatens the whole idea of a ‘cab rank’ of financially strong associations waiting to rescue those who fall into trouble. David Montague of London & Quadrant, which rescued Ujima at the beginning of the year, says the lenders’ attitude could ‘kill off’ the rescue market. ‘Organisations like L&Q Group are not going to pay an increased margin as a consequence of rescuing another assocation’.
Little wonder that the National Housing Federation is lobbying the government so hard for measures to stop the banks unreasonably changing loan conditions to its members.
And with the credit crunch and housing market downturn increasing the pressure on associations by the day, it’s little wonder that the new Tenant Services Authority ackowledges that it is a serious issue.
But does the government as a whole get the message? The prospect of struggling associations rushing to the cab rank only to find that all the taxi drivers have turned their lights off does not bear thinking about.