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Meeting the development challenge

Sponsored by Clarion

Theresa May has challenged housing associations to up their delivery of new homes. Inside Housing gathers sector leaders together, in association with Clarion, to discuss the issues and opportunities that lie ahead. Photography by Belinda Lawley

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Inside Housing gathers sector leaders together, in association with Clarion, to discuss the issues and opportunities that lie ahead for development of homes (sponsored) #ukhousing

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The government has named housing associations as its key partner when it comes to building new homes – a major turnaround from the David Cameron years.

That means it expects the sector to step up and increase delivery and move away from a reliance on Section 106 homes.

To think about what this might mean, a group of sector leaders gathered at the end of 2018 at a round table organised by Inside Housing, in association with Clarion.

“It’s been an extraordinary couple of years in housing policy terms,” says Emma Maier, editor-in-chief at Inside Housing, as she sets the scene.
“There’s been a 1800 shift in the government’s approach.

“In the past few months, Theresa May has very squarely talked about housing associations as delivery partners, and of their unique role as guardians of social assets. A couple of weeks later she took the unprecedented step of removing the local authority borrowing cap and has charged councils and social landlords with building more homes.”

James Prestwich is head of policy at the National Housing Federation. He agrees with Ms Maier: “This is a unique time and a unique opportunity. It’s all about potential and how to make the most of that potential.”

Joy Whinnerah, executive director of development and investment, Broadacres Housing Association and Boris Worrall, group chief executive, Rooftop Housing Group

Other panellists agree that the government’s stance is to be welcomed. Boris Worrall, chief executive of Rooftop Housing Group, notes that his organisation’s interaction with Homes England has “utterly changed” in the past 18 months.

He gives the example of a scheme Rooftop is currently working on with Homes England, which illustrates a shift in attitude. “This will effectively be an affordable-led major development, with a smaller element for market sale. Homes England is almost looking at this as an investment proposition. So there is definitely the appetite there.”

Bernie Keenan, deputy chief executive at Progress Housing Group, a specialist in supported housing, agrees that the change of policy is to be welcomed, adding: “The biggest issue for us is confidence. Taken together, this change of approach gives us confidence to continue to invest in our business as it recognises the importance of supported housing.”

Andrew Carter, chief executive, Centre for Cities

Rob Lane, commercial finance director at Clarion, explains that the housing association has plans at scale over the next decade to build 50,000 new homes. “To achieve this we have to think differently around asset management,” he says. While he is encouraged by the latest policy initiatives, Mr Lane believes more needs to be done. He emphasises that in terms of where social housing is most needed, particularly in London, there is still a big funding gap.

“In order to build the social housing that is needed there does need to be further government subsidy; housing associations and local authorities can’t rise to that challenge on their own. What these latest policy initiatives from the government do show is that they are now listening, and they are more engaged,” he says.

Panellists agree that partnerships and collaboration are vital to make the housing targets achievable.

Mr Prestwich notes that the sector as a whole has been slow to adapt to a partnership model.

Alan Lewin, chair at Iceni Homes, adds that as the market is diversifying, “the challenge is to develop partnering skills”.

Rob Lane, commercial finance director, Clarion and Bernie Keenan, deputy chief executive, Progress Housing Group

Section 106

Section 106 and its role in driving forward development is also considered.

Mr Lane raises concerns around whether the sector will be able to upscale its capability from Section 106, which it is used to, to actually buying land and developing it on its own.

For others, such as Mr Worrall, there are concerns around misuse. He notes that one local authority his organisation is working with has been told by private developers that they won’t enter into Section 106 agreements, meaning they will only build with a zero affordable element.

“That is disgraceful,” he says. “I agree with James [Prestwich] that Section 106 needs a rethink somehow.”

Andrew Carter, chief executive of Centre for Cities, says more attention needs to be paid to the impact that the price and availability of land play in holding back development.

“Land already in the system already has a value attached to it,” he notes. “Councils are reintroducing a significant player into the system, which means that prices will go up as competition for land goes up. The problem right now is that we are not dealing sufficiently with
introducing new land into the system.”

Mr Worrall suggests the absence of a coherent long-term housing strategy is also a problem. “What’s really interesting is that all the levers are now being pulled. You are pouring money into a system that is flawed at best. At the moment the rush is on numbers.

“We have identified so many flaws and issues with that system. We in the sector have asked many times for a long-term strategy.”

Bernie Keenan, deputy chief executive, Progress Housing Group

Lack of strategy

While the current lack of strategy is not ideal, Mr Carter says there is always a danger that people have “an aspiration for Utopia, and those things never really happen”.

Mr Lewin agrees that rather than waiting for a strategy to emerge, it is important for the sector to start finding solutions through collaborative partnerships. “We need to have more of a ‘can-do’ focus,” he says.

Mr Keenan is more positive in his assessment of the way forward. The change in mood music and approach from the government has been a significant help, he suggests.

“At least now we have some stability around funding, and a government with a pluralist view,” he says. “If we can have that for a period of time, that by itself will make a huge difference.

“There are opportunities for long-term partnerships, but they need to be built on long-term confidence. I think realistically that is something that could be delivered.”

Alan Lewin, chair, Iceni Homes and Rob Lane, commercial finance director, Clarion

Arita Morris is a director at Child Graddon Lewis architects. She says that the company audited the projects it had completed in the past 15 years and that there had been a significant period of time between moving from a “standing start to delivery”, which meant projects tended to be exposed to different economic and political cycles. This places a responsibility on partners to have strong strategies and visions of their own, she suggests.

“So I agree that there does need to be some resilience within housing associations and local authorities,” she states. “There needs to be vision and leadership, which maintains that, as well as confidence. This can be particularly difficult given the shifting winds of policy.”

The theme of political whims and how they affect policy is picked up on by a number of panellists.

“A government of this persuasion will always try to flip the model to homeownership. They will always find a way in the policy system to do that,” says Mr Carter. “That’s just their political persuasion, in the same way a [Jeremy] Corbyn government would try to reverse this with partially owned and shared ownership models.”

Arita Morris, director, Child Graddon Lewis and James Prestwich, head of policy, National Housing Federation

Regulator’s position

Joy Whinnerah, executive director of development and investment at Broadacres Housing Association, hints that when it comes to listening to and empowering communities for new development, it would help if the regulator’s position was clearer.

“We work with a lot of community land trusts, and have more and more requests for heritage centres and tea rooms, and all the things that create a sense of place,” she says.

“There is a question for us, in terms of the sector doing what it’s good at, [relating to] this community-led development. There is a risk that comes with that for us as a housing association, in terms of how the regulator will look at that, in terms of diversification away from our core business. This presents a real challenge, in particular in rural areas.”

“One of the strong points of the sector is that commitment to the community,” notes Mr Prestwich.

Other panellists agree. Mr Keenan picks up on the fundamental role of housing associations in building social value, which needs to be balanced against other pressures, such as the drive to create more homes.

“There’s got to be a balance, but if we don’t deal with the fundamental problems of things like homelessness, I don’t see the point in us,” he says.

Joy Whinnerah, executive director of development and investment, Broadacres Housing Association

Mr Prestwich believes that social value still has its place. He reflects on how far the sector has come in the past three years. “In 2015 we were facing extinction, and we had to engage with what the government wanted.

“If we are building more homes, then the government will be far more receptive to us as a sector and our social values. If you look at Theresa May’s speech, she’s now saying the things that we believe.”

Lacking synergy

“There’s a whole upskilling that’s needed with housing associations and local authorities,” adds Mr Lane. “We need to be aware of the pitfalls and the fact that mistakes may be made along the way. The problem with the sector at the moment is that it lacks a unified voice.”

Ms Whinnerah adds that although there may be a lack of synergy, the most important thing is to deliver: “Pushing those partnerships is important. We can be very influential in our own communities. The challenge for the sector is to just get on with it.”

Mr Lewin perhaps best sums up the mood of those attending, as well as the sector at large: From a policy perspective, the tide has most definitely turned, and we’ve got to seize this opportunity.”