Under pressure

Inefficient housing associations will from April have nowhere to hide – that is the strong message from the new regulatory framework published this week.

The current value for money regulations only require landlords to inform their tenants in annual reports of expenditure and what plans they have to ensure value for money.

But from April 2013, associations will have to comply with much more stringent rules. They will have to publish self-assessments demonstrating that they understand the financial, social and environmental return on their assets.

Much talk in the sector over recent months has focused on how landlords can continue to develop without the large levels of public subsidy we have seen in the past. The need to identify latent capacity in balance sheets and working out how to ‘sweat’ assets to fund new homes has never been more important.

Many associations recognise this and are already undergoing an appraisal of their assets.

But the fact the regulator has felt the need to amend its standards to force associations to obtain better value for money suggests much more needs to be done.

Associations which are not achieving value for money in order to achieve their objectives can expect firm treatment from the regulator.

With a growing housebuilding crisis, illustrated by the pitiful numbers of new affordable housing starts announced this week, and not much public money around, there is now simply no excuse for not looking to squeeze extra value from balance sheets.