Which housing associations are building the most homes? And which have the biggest pipelines? Jess McCabe finds out
The number of homes built by the biggest housing associations has dropped 15%, Inside Housing can reveal.
This will probably not surprise many people reading Inside Housing. COVID-19 and supply chain shortages are slowing down work on building sites. On the other hand, fire safety and the expected costs of retrofitting existing stock to be more energy efficient are cutting how much money social landlords can commit to building new homes.
The result? Our annual list of which associations are building the most homes gives an indication. Inside Housing’s top 50 Biggest Builders completed 34,753 homes in 2020/21, compared to 40,681 last year. They invested £6.1bn to build the homes, of which £597.7m was some form of government grant.
That is the sector-wide impact. What does that look like when you turn to how the different housing associations have performed?
For some it was a dramatic impact. Look at LiveWest, which told us: “We expected to deliver 1,234 affordable homes in 2020/21 but ended up delivering 701.” That is not even 60% of its plan.
Some impacts seem to be short term – delays pushing completion on a project from one financial year to the next. Notting Hill Genesis is one example of this, telling us: “Our handover plans have been delayed as a result of the pandemic, with circa 500 handovers being delayed from 2020/21 into the 2021/22 year, representing 30% of our planned handovers.”
Closure of sites for lockdown and actual cases of COVID-19 shutting down work on sites were reported. Planning departments also shut down for periods, which has slowed developments. But also the shortages of materials seen across the construction industry at the moment has had an impact, with some developers stockpiling and worsening the situation. The flipside of this is the housing market – as prices and demand have been high in many areas, some landlords said this may limit the impact of these negative factors on their pipeline.
Building safety has also cut into development – housing associations have redirected funds from their development pipelines to pay to make their existing buildings safe from fire. But it has also increased the cost of building.
|2021 rank||Housing association||Number of homes||Total completions 2020/21||Social rent||Affordable rent||Intermediate rent product||Low-cost homeownership||Market sale||Private rent||Total investment||Total government grant|
|2||Places for People||219,616||2,186||175||559||0||177||1,144||131||n/a||n/a|
|4||Notting Hill Genesis||66,478||1,276||25||269||68||394||276||244||£634.7m||£19.4m|
|10||Metropolitan Thames Valley||58,000||923||47||182||0||475||219||0||£290.0m||£17.4m|
|15||Abri (formerly Radian)||35,000||801||202||157||0||341||101||0||£119.4m||£3.9m|
Source: Inside Housing survey
Notes: 1. Number of affordable rent homes completed includes 237 at London Affordable Rent 2. Includes both Aster Group and East Boro Housing Trust 3. Total includes 15 homes for people with additional support needs 4. Affordable rent number includes 96 homes built to London Living Rent and 40 built to the Department of Health’s affordable rent – elderly category
Jon Milburn, group development director at The Guinness Partnership, explains: “We’re doing things like in medium-sized blocks of flats where we might previously have relied on one lift and one staircase, we’re putting in two lifts and two other means of escape – that increases your costs, makes your building much less efficient and impacts on financial viabilities.
“Our determination to produce buildings as safe as they can reasonably be [means] we’ve taken a lot longer time on detail design before we enter into a design-and-build-contract, to make sure we’re getting the fire strategy right… That’s impacted not so much on number of homes, more on the speed of the programme.”
If it wasn’t for the delays, he says, Guinness might have started on site with 1,600 to 1,700 homes last financial year, instead of its actual figure – 1,349.
Number of social rent homes completed by the top 50 in 2020/21
Number of social rent homes started
Number of low-cost homeownership homes completed
|Housing association||How many homes do you own/manage (2021)?||Starts on site in 2020/21|
Source: Inside Housing survey
L&Q built the most homes this year, meaning it is at the top of our list of the 50 biggest builders in the sector.
The London-based landlord completed 2,694 homes, an 11% increase on the previous year (when it built 2,433).
Still, Vicky Savage, L&Q’s group director of development and sales, sings a similar song to the rest of the sector. “Inevitably, the costs of required fire safety and remediation works mean build programmes are down across the sector,” she says. “More challenges remain, from ensuring the continued supply of materials and labour, to adapting to the decarbonisation agenda and Future Homes Standard. With a cross-subsidy model reliant on strong house prices, we’ll be watching the market carefully.”
There is not a huge amount of difference in the commentary offered by those who have built a large amount this year, and those who have seen numbers drop off. Southern is one of those with a significant reduction (see box: Risers and fallers).
|2021 rank||Housing association||Number of homes expected to complete in 2021/22||Number with site secured (ownership or options)||Number of homes expected to complete in next two years||Number with site secured (ownership or options)||Number of homes expected to complete in next five years||Number with site secured (ownership or options)|
|2||Places for People||1,741||888||4,026||2,245||12,896||4,500|
|9||Notting Hill Genesis||1,341||1,341||2,097||2,097||5,461||5,461|
|17||Abri (formerly Radian)||970||957||2,189||2,031||4,489||3,313|
|22||Metropolitan Thames Valley||830||830||1,750||1,750||6,200||3,596|
|48||Wales & West||435||435||1,000||855||2,500||1,436|
Source: Inside Housing survey
Notes: 1. Includes both Aster Group and East Boro Housing Trust 2. Projected pipeline figures are estimates 3. Figures above are based on current development strategy and financial plan projections and are subject to strategic partnership application outcome 4. All the information regarding new developments in the future pipeline is subject to grant funding 5. Some of the information contained is estimated due to time constraints at the present time in sourcing the actual data
Oliver Boundy, executive director of development and growth at the association, notes: “The housing sector is undoubtedly facing many challenges, not only COVID-19 and Brexit but also cladding and building safety concerns, net zero carbon and EPC targets – all in the context of four years of rent reduction, reduced government grant and growing social care costs. Our commitment to deliver a first-class service to our residents and to play our part in overcoming the housing crisis and the mounting climate emergency has never been greater. The figures show that achieving these goals is not without risk and changes in the external operating environment present the occasional setback.”
Questions about whether landlords are fulfilling their social purpose inevitably mean looking not only at how many homes they are building, but also at who they are for and what tenure they are. This year’s data again points to why some of these questions might be asked, with the top 50 having built nearly as many for sale as they did for rent (they built 16,490 homes for sale tenures, compared with 18,248 taking in all rent tenures).
Affordable rent and low-cost homeownership make up the bulk of homes built by housing associations this year – with affordable rent by a small margin producing the highest number, 11,352 homes, and all in England, as this tenure does not exist in the rest of the UK. Low-cost homeownership, which includes shared ownership, was not far behind, with 10,700. The number of social rent homes completed by the Biggest Builders dropped 13% this year, from 5,727 to 5,009. But starts figures are more promising, showing that 7,667 social rent homes began construction in 2020/21.
“We are clear that, where we can, we should prioritise delivery of homes for social rent”
We can also see the impact of English associations seeking to build more social rent. The housing association building the most social rent homes this year is Bromford. Chief investment officer Martyn Blackman says this was a conscious decision: “A key part of our purpose is to provide affordable homes for people who can’t access market housing, and we believe in providing safe, secure and warm homes to enable our current and future customers to thrive. We are clear that, where we can, we should prioritise delivery of homes for social rent.”
Richard Cook, group director of development at Clarion, which placed third in the top 50, notes that 90% of its 2,126 completions this year were in “affordable tenures”.
One Housing said its drop in completions this year is due to a change in strategy to build more affordable homes. Mike Johnson, group director of development, says: “The reduction in the number of homes we built last year is the result of a natural dip in the programme as we trade out the old strategy, and our new homes delivery will start to increase over the next few years.”
Housing Plus Group, another to drop out of the top 50, after completing 191 homes, told us in its submission: “Our original target for 2020/21 was 316. This was revised down to 249 in August 2020 and 191 eventually delivered.”
It notes that there were many issues that fed into this. Sales delays at solicitors – with shared ownership customers not being prioritised – delayed completions. Stockpiling of materials by national house builders has impacted local builders. One of its contractors liquidated for reasons unrelated to the pandemic, but the association noted that this led to it having to re-tender the work “and [we] have had to pay far more than we predicted, definitely a pandemic impact”.
All this paints a vivid picture of the sorts of roadblocks that have impacted on the sector. As you will see below, it has had an impact as much on those that have managed to build large numbers, as those that have seen numbers drop.
|Housing association||How many homes do you own/manage (2021)?||Total completions 2020/21||Completions as a percentage of total stock|
Source: Inside Housing survey
Four in 10 of the 34,753 homes completed last year by the top 50 were bought from developers under Section 106 deals – or Section 75, as the policy is known as in Scotland.
This is essentially the same proportion as last year. Even though we heard from many landlords that they are moving away from buying up affordable housing built by private developers, this shows that it continues to be significant. Half of the five-year development pipeline is expected to come from Section 106 or Section 75.
However, there are still plenty of signs that housing associations expect to and want to be building more soon. The top 50 housing associations with the biggest development pipelines expect to build 44,262 homes this year, and 234,658 in the next five years.
That is actually an 18% increase in that long-term pipeline figure, as last year the same question recorded an answer of only 199,387. Obviously, the further ahead in time you look, the less certain those figures become. But the top 50 told us that they have sites secured for 48% of those homes – and the reality is likely a higher proportion, because not all landlords provided information on the number of sites they have secured.
As usual, the sector will have to wait and see if it is actually able to deliver on those numbers. As the past year has proved more than ever, plans can quickly become derailed.
|Housing association||Total completions 2020/21||Of these, how many were for social rent?||Social rent as a percentage of completions|
|Wales & West||287||281||97.9%|
Source: Inside Housing survey
|Housing association||Total completions 2020/21||Of these, how many were for low-cost homeownership?||Low-cost homeownership as a percentage of completions|
|Metropolitan Thames Valley||923||475||51.46%|
|Notting Hill Genesis||1,276||394||30.88%|
|Platform Housing Group||909||373||41.03%|
Source: Inside Housing survey
Overall numbers of homes being built fell, but within that sector-wide figure there are many different stories to be found.
Not everyone’s numbers are down. It is worth a look at some of those that bucked the trend. Take Link Group in Scotland, whose completions more than trebled from 131 to 477, making
it a new entry into the top 50 at number 31. “In short, Link has upscaled its development programme in response to the Scottish government’s commitment for ‘more homes’,” says Colin Culross, commercial director at the association. Its approach has been to develop a number of large projects, which has resulted in a high number of completions over a short period of time.
Although that is undoubtedly a huge increase, Link’s appraisal
of its performance is muted. “Our original target for 2020/21 was 1,654 properties but we only delivered one-third of this,” the housing association noted as it sent us its data. That figure, if achieved, would have put it in the top 10 associations in the UK.
The Scottish government shut down construction in the country for a full three months, much longer than in England, which has had an impact on the outcomes for all Scottish landlords in the table.
The Guinness Partnership is another landlord with a huge year-on-year increase, of 154%, which catapulted it to 25th in our table this year. Jon Milburn, development director at the housing association, says: “We have been regrowing the development programme over the last two, three years. We bought a lot of land in 2018/19, early 2020, getting planning on that and bringing it to the construction phase.
So you would expect the number of our completions to be growing year-on-year for the next three to four years.”
He says that Guinness also benefited from extensive work to keep contractors onside in the first lockdown last year. “We put a lot of work into ensuring our contractors’ financial stability – pay up on time, give them and their banks the assurance that we were going to continue to pay and wouldn’t seek to punish our contractor partners for lateness on site,” he says.
Even so, Guinness also built fewer homes than it expected to. Mr Milburn says: “But for COVID, we’d probably have achieved about 650 completions.”
For some, though, the past year has seen a significant drop: 20%
of last year’s top 50 have fallen out of the table. The biggest absence is the mystery of Swan, which despite building 708 homes last year – placing it at number 19 – has refused to respond to this year’s survey. Normally Inside Housing receives a 100% response rate from the biggest 100 housing associations, and most of the biggest 150, so this is an anomaly.
Elsewhere, landlords fell out on dramatic declines. Southern saw the biggest – a 78% year-on-year drop from 419 completions, which put it 37th in last year’s table, to 93 this year.
Oliver Boundy, executive director of development and growth at Southern, says: “We remain committed to achieving our ambitious development programme. However, the safety, well-being and support of our existing customers, staff and contractors is always our priority. During the pandemic, this has meant some development activities understandably have had to progress more slowly than originally scheduled. The impact of the first lockdown and social distancing restrictions, for example, resulted in considerable delays to completion, particularly at some of the group’s larger sites. Some sites which were due to complete in the year have experienced delays.”
Next year the association expects to complete 371 homes, which may indicate that this year is a bit of a blip.
Poplar Harca, which also dropped out of the listing after completions fell from 470 to 154 homes, noted that this was because of cyclical patterns in its development programme. It said that it has 600 homes on site currently, and 4,000 in its pipeline.
We send an extensive survey to the biggest housing associations in the UK, ranked by the number of homes they own and manage. This produced a table of data from 138 housing associations. The exception this year is Swan – although this association built 708 homes in 2019/20, placing it 19th in the league table, this year it has refused to provide data.
From that, we chose the top 50 Biggest Builders by completions – the ones that completed the most homes between April 2020 and March 2021.
We also have a top 50 Biggest Builders by pipeline – the organisations that expect to build the most in the current financial year, or between April 2021 and March 2022.
We ask about the tenure of homes being built and how they are financed.
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