01 April 2004
RSLs face stiff competition in building new social housing, warns regulator
Housing associations must raise their performance to beat off stiff new competition for the right to build homes, according to their regulator.
Peter Dixon, who became chair of the Housing Corporation last September, warned registered social landlords that they must 'keep ahead of the game' to ensure they continue to receive grants for new social housing.
Speaking 24 hours after the corporation awarded funds worth £3.3bn for 67,000 homes over the next two years, Dixon pointed out that in future RSLs are likely to be bidding against private developers and arm's-length management organisations.
'The government is pressing hard for delivery,' he told the National Housing Federation finance conference, held at Warwick University from March 24–26. 'If the sector fails to respond, it cannot assume that it will remain the main mechanism for delivery.'
The plan to allow non-RSLs to receive social housing grant is included in the Housing Bill going through Parliament. The RSL sector, he added, must preserve its reputation at the same time as expanding activities in areas such as neighbourhood renewal.
'Its ability to explain itself is more essential than ever,' he told delegates. 'Identity can't be based on empty rhetoric.'
Although Dixon stressed there was no question of any leadership crisis in the sector, landlords must avoid the 'lurid headlines' that followed last year's governance row at Places for People. 'Some associations display a lack of public sensitivity in relation to issues such as executive remuneration and severance pay,' he said.
NHF chief executive Jim Coulter highlighted the need to work collectively and tackle 'negative perceptions' surrounding housing associations. 'We need leaders that co-operate with one another and place less emphasis on competition,' he said.
More than 400 RSLs have joined the NHF's 'In Business for Neighbourhoods' campaign, launched six months ago, and will shortly have their business plans audited to show they are providing better customer service.
Stock transfers set to need less private finance
Demand for private finance to fund stock transfers looks set to fall as fewer councils switch large numbers of homes to new landlords, according to the Housing Corporation.
Registered social landlords hope to raise £8.7bn from banks and building societies over the next four years – £5.4bn for transfers and £3.3bn for new developments. Twelve months ago, the corporation forecast that RSLs would require £10bn over a four year period while, two years ago, the equivalent forecast was £12.7bn.
The figures are contained in the latest edition of the Private finance monitoring bulletin, jointly published by the Housing Corporation and the National Housing Federation as the Warwick conference was taking place.
It reports that, in 2002/03, RSLs negotiated a record £6bn of new finance – nearly double the £3.3bn the previous year. However, the 2002/03 transfer programme accounted for just £1.8bn. 'The recent level of transfers has been disappointingly low in both numbers and level of borrowing,' says the report.
In future, there will be more partial and negative-value transfers, along with Private Finance Initiative schemes, which will require lenders to come up with innovative solutions to complex proposals.
'This will be attractive to some but not to others,' it adds. As usual, the bulletin warns that landlords are borrowing from a small number of lenders. Four funders have provided more than half the £30.6bn raised in private finance by RSLs since 1989 while 16 lenders have provided 81% of all funding.
Funds for pathfinders announced
Almost £200m is being pumped into estates in the north of England to raise the value of homes in deprived communities.
Deputy Prime Minister John Prescott announced the allocations to three housing market renewal pathfinder projects on March 26 and promised the money would also be used to tackle poverty and antisocial behaviour. In South Yorkshire, £71m is being spent improving more than 2,000 homes in Sheffield, Doncaster and other major towns.
In East Lancashire, £68m will be used to refurbish 1,100 homes and demolish 800 surplus properties in towns such as Burnley and Blackburn.
A further £53.5m will be spent on improving 400 homes in Oldham and Rochdale, and demolishing 300. The government announced the creation of nine market renewal pathfinders just over a year ago. Three have already received allocations ranging between £69m and £125m.
'This is about much more than just getting the buildings right,' said Prescott. 'It's about rebuilding communities and creating places where people want to live and work and which have a long-term future.'
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