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Small housing associations have the potential to develop
Appetite to develop is flourishing among smaller providers in London, but there are barriers too, writes Clare Norton
There is a perception that small housing associations are not developing housing for their local communities to their fullest potential.
However, the G320 has discovered significant achievements to date in the number of homes delivered by members and a real and growing appetite for development among our members through our research.
Over October, with the assistance of Altair, we researched members’ current plans and appetite for development in London and South East England, but also explored the barriers and challenges which may be holding back development plans.
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Our high-level findings from surveying 39 of our 68 members are below.
They build a strong picture of the current approach to development in small housing associations and inform the identification of opportunities for future additional support.
Currently 59% (23 of the 39 respondents) have a development programme. These 23 organisations have a combined programme for this year of around 373 homes, which is approximately 2% of total stock. Last year the same group developed 176 homes, so development has more than doubled.
“The commitment to meeting the need for housing is being met across all parts of the sector.”
Of the 41% of respondents (16) that currently do not have a development programme, all aspire to be a developing organisation at some point in the future
Twenty-six of the 39 organisations said they would be willing to sign up to a development commitment.
Of the current development programmes, 90% are for social rent – with 60% of members funding this from existing resources, Greater London Authority (GLA) grant, Right to Buy receipts and capital raised from asset disposals.
This all seems very promising and shows that the commitment to meeting the need for housing is being met across all parts of the sector.
However, we also know that housing associations experience plenty of barriers to developing more homes.
As a membership body, we wanted to know whether there was anything we could do to grow our capacity and in particular to maximise the potential of small sites for more homes across London and the South East.
“We also know that housing associations experience plenty of barriers to developing more homes.”
The GLA is planning to launch its Small Sites Initiative soon, and the mayor’s London Housing Strategy actively encourages small housing associations to develop more homes.
We therefore have a good policy environment in which to build our own capacity.
We looked at board capacity and expertise to develop. Interestingly, more than 70% of members had fair or good expertise levels on the board.
However, 80% do not have in-house development teams and 38% do not have access to this expertise. Many use external consultants to lead the development for them.
When reviewing knowledge of the development process, members were least confident with the sales of market or shared ownership properties (58% of organisations) which likely reflects the nature of the current housing stock members manage.
The barriers members experience and need support with are:
- Planning permission process.
- Funding and financial constraints.
- Land – access to land is limited, especially in London. The cost of land also makes it difficult to develop. Being a small player makes it difficult to compete in a challenging London land market.
- Competing strategic priorities, with some organisations needing to invest in existing assets to meet the Decent Homes Standard.
- Being too small/not known by developers and other parties which makes it difficult to win opportunities.
- Lack of support from local authorities and lack of guidance and assistance for smaller providers.
Following the research, G320 is working towards finding solutions to these barriers and seeking assistance from larger partners to develop the following:
- A guide on development for small organisations
- A shared development advisor for groups of small organisations
- Sharing procurement, setting up a joint vehicle or partnering with a larger organisation
- Developing a G320 housing development pledge for homes across London and the South East we can work towards
It is heartening that the appetite and expertise to meet London’s housing need is flourishing among small housing associations.
However, we do know that every small housing association is at its own point on that journey, with many needing considerably more support to move this forward.
By sharing the story and expertise of those who are managing to develop more high quality homes among us all, we expect to enable every member to be able to progress on their journey.
It will take some time to get to a point where the majority of small housing associations are developing across London, but by working to grow skills and knowledge, and therefore confidence, we believe we will have a vibrant, growing small association sector where the majority are thriving and are meeting local housing needs.
Read the full G320/Altair report
Clare Norton, chief executive, Peter Bedford Housing Association; and chair, G320
