Wednesday, 05 August 2015

Housing associations prepare for new role

Housing associations must forge new relationships with their tenants to help with increasingly squeezed finances, according to a report released today.

A report by the left-wing think tank The Smith Institute says that the ‘relationship between housing associations and their tenants is at a crossroads’.

‘On the one hand, all social landlords aspire to improve customer satisfaction and performance, but on the other they have tough decisions to make on rent levels and arrears and to ensure value for money,’ it says.

Social hearted, commercially minded examines the changing role of housing associations and challenges they face as they adjust to a future with little or no subsidies.

Fifty leading players in the sector were interviewed in late 2012 and early 2013 including housing association chief executives and senior staff, board members, developers and politicians.

The report finds one of the big tests for housing associations is the penalty for under-occupation of social housing, or ‘bedroom tax’.

It suggests some housing associations might end up subsidising the government and it would be ‘difficult to evict a family for the sake of £11 a week’. However others vowed to ‘take a tougher stance from the start, for fear that if they don’t it will hurt their balance sheet’.  

The research found the general view among housing associations was they will concentrate on tenants who are in work and not – or at least less – reliant on housing benefit.

‘This has provoked some councils to claim that they are left carrying all the burden of housing the most vulnerable,’ the report states.  

‘All the policy drivers are pulling associations away from housing the very poorest, which is placing enormous pressure on councils to allocate more people in the private rented sector.’

Other findings in the paper are:

  • Bond financing is set to increase
  • Associations have mixed views on the viability of developing homes for private rent
  • There are concerns associations have the skills at board and management level to thrive in a more commercially minded environment
  • It is a widely held view working more closely with local authorities will be key moving forward.

Neil Hadden, chief executive of Genesis, which funded the report, said: ‘The world in which housing associations operate is subject to far reaching and rapid change. We need to evolve to cope with these changes if we are to survive and thrive.’

The report concludes: ‘[The housing association sector is] still using [its] housing asset base to act for the good of society. All the money they earn, all the surpluses they make, are ploughed back into providing and managing more homes, getting more people back into work, or caring for the ageing and vulnerable.’

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