28 September 2007
Social landlords must quickly decide their unique selling points to compete in the increasingly complex house-building market, the new head of the Housing Corporation has said.
In his first major speech since taking over as the corporation's acting chief executive, Steve Douglas warned the National Housing Federation's annual conference in Birmingham, held on September 19–21, that the future for many registered social landlords is unclear as more private companies and council-owned housing companies bid for grants.
'Some housing association business plans will have more in common with the likes of Barratt, where you're looking to the money markets for future development,' he said. 'Others will have more in common with arm's-length management organisations.'
Douglas said the RSL sector was in 'rude health' and well placed to claim a large proportion of the £8bn on offer for affordable housing in 2008/11. But at the same time the corporation will enforce higher standards before handing over to the new Homes and Communities Agency in 2009. About 5% of bids currently fail to meet design standards and require waivers to qualify for grants.
From next year, all grant-funded homes will be assessed by the Commission for Architecture and the Built Environment and there will be a presumption against waivers, he added.
Responding to the NHF's report on the borrowing capacity of housing associations, Douglas told Public Finance that the corporation and RSLs were now 'on the same playing field', even though there is a difference of opinion on figures.
The NHF claims associations can afford to reduce grant rates from 44% to 39%, while the corporation believes as little as 34% of each new home should be funded through the public purse.
The NHF plans revolve around RSLs building 10,000 homes per year for sale at market prices instead of 2,000, and raising rents by an extra 0.5% annually. Earlier, housing minister Yvette Cooper appeared to rule out any immediate change to the rent formula, even though the rent restructuring timetable is being reviewed by the government.
The federation claims that adding 0.5% to rents will cost tenants only an average of 30p per week, but Cooper told delegates it was a complex issue.
'Light touch' might not work on social housing
Light touch regulation might not be sufficient to improve efficiency in social housing, said the man appointed by ministers to review the way the sector is regulated.
Professor Martin Cave, whose proposals for modernising regulation are being considered by the Department for Communities and Local Government, said stronger measures might be needed to iron out variations in costs.
Cave's report said that any new regulator should not be 'on the backs' of councils, RSLs and other housing providers. But he told delegates: 'Whether the system is sufficient to deal with inefficiencies is something the new regulator is going to have to keep its eye on.'
Cave declined to comment on whether the Audit Commission or a new body should regulate the sector, but said councils must come under the same framework as RSLs so all tenants had the same protection. 'I'm worried there will be inadequate regulation of local authorities,' he said. 'I don't think central or local government is particularly well placed to regulate that provision.'
Chief talks tough on private builders
Private developers are putting profits ahead of stopping climate change because they are not required to cut carbon emissions in new homes, NHF chief executive David Orr told delegates.
Just 2% of homes built by private developers meet minimum standards for energy efficiency, compared with 92% of those built by housing associations, he said.
Earlier in the conference, housing minister Yvette Cooper urged social landlords to back the government's target for no carbon emissions from new homes after 2016.
By constructing homes that are more environmentally friendly, she said, RSLs could help build a national consensus over the need for more housing.
The zero-carbon target will be tougher than the one that RSLs and others currently meet to qualify for grants through the National Affordable Housing Programme.
But Orr pointed out that there is no minimum standard for private housing. 'It's time that ministers legally locked private developers into the same timetable as housing associations,' he said.
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