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Association’s financial viability could be hit by huge self-build repair bill

A small London housing association could see its long-term financial viability adversely impacted by a large maintenance bill to improve dozens of its self-build properties built in the 1990s.

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Association’s financial viability hit after huge self-build repair bill #ukhousing

A small London housing association is considering its next steps after a huge repair bill for 70 of its self-build properties has hit its financial viability #ukhousing

Chisel Housing Association has told residents that it would face financial difficulties in five years’ time if nothing was done to help it contend with the £4.2m bill to repair its 70 self-build homes.

In 2017, a stock condition survey revealed that the self-build homes owned by Chisel required £4.2m of investment over the next 10 years, nearly three times the size of the landlord’s £1.54m 2017/18 turnover figure.

Financial forecasting from the association has found that its expected rental income over the next decade would not be sufficient to cover this level of investment.

A Chisel spokesperson stressed that this would only impact its long-term financial viability, and that its short-term viability was stable.

Comprising approximately a third of Chisel’s stock, the self-build homes, located in south-east London, were built by tenants in the 1990s in exchange for discounted rents.

During a consultation meeting with residents in May, the association outlined potential actions it could take to reduce costs and ensure its financial health for the future.


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These include phasing out the self-builder discount, refinancing, or merging with another housing association.

Self-builders who still live in their properties have maintained their discounts, with some paying up to 40% less than the average social rent in the area. Any proposed increase would see rents rise to social rent level.

However, Chisel said that even removing the discount would not come close to rectifying its “financial situation” on its own. Any increase would also need government approval before being implemented.

Other options currently being considered include selling the organisation’s investment property in Brighton or merging with another housing association, although this was seen as a last resort.

The association said it has had some “informal initial discussions” with local social housing providers that would be better placed to invest in these self-build homes but no further action had been taken so far.

An association spokesperson told Inside Housing that Chisel had been consulting residents for 18 months over next steps and many were supportive of ensuring Chisel remained independent.

They added: “We have revised our 30-year financial model with the help of consultants and have a 30-year financial model that works but this requires us to increase our income and reduce our expenditure especially in relation to our stock reinvestment requirements.”

Chisel’s self-build homes, situated in the boroughs of Lewisham and Bromley, are based on the Walter Segal method of construction, and include grass roofs and lightweight timber frames.

Walter Segal was an architect who in the 1960s developed a system of self-building that allows homes to be built by people with minimal building experience.

Roughly 200 low-cost self-build homes were built using this method in London in the latter part of the 20th century.

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