Apr 4th, 09:31
Blog - 4th April 2023
In this blog I consider social housing finance including the views of the Local Government Association (LGA); the enquiry of the parliamentary committee for levelling up, housing & communities; independent tenants’ advice at Carnwath Road in Fulham; and webinars.
Social Housing Finance
I have been expressing concern in this blog for some years about the state of social housing finance in both the local authority and housing association sectors.
Resources have been squeezed by rent reductions, rent caps, a self-financing settlement for local government that failed to fund major repairs fully; the reinvigoration of ‘right to buy’ and its extension to housing associations; and by a development model that expects providers to make up for inadequate levels of social housing grant by cross-subsidising from diminishing resources. The result is a financial model that is not sustainable; an increasing shortage of social and affordable housing; and a deteriorating housing stock that has led to scandals including the Grenfell Tower fire, the death of Awaab Ishak in a damp home in Rochdale, and countless shocking reports of poor housing on ITV News.
And, despite this lack of resources, government rightly expects social landlords to meet ambitious targets for decarbonisation and new statutory requirements for building safety.
Flats on Lambeth Borough Council's China Walk estate
The Local Government Association has warned that the 7% rent caps in place in 2023 and 2024 will slow down or halt essential housebuilding projects, key maintenance and improvement works and retrofitting of existing stock in pursuit of net zero goals and more energy efficient homes. They argued that the Government should provide funding to cover the loss of income but this has not been forthcoming.
Cllr David Renard (Conservative, Swindon), housing spokesperson for the Local Government Association, said that:
“Councils recognise the pressures on tenants, exacerbated by the rising cost of living and inflation, and had already been considering their approach to next year’s rents to ensure that a careful balance is made between affordability for tenants and investment in the homes that they live in. It is right that rents are kept as low as possible but our analysis shows that the… rent cap will have a significant medium to long term impact on councils’ ability to build the homes our communities desperately need, which is one of the best ways to boost growth. With more than one million people on council house waiting lists and the retrofitting of existing housing stock key to the country’s net zero goals, imposing a cap without compensating councils for lost income would have a hugely detrimental impact to those efforts.”
Council Houses in Gateshead
It is therefore good news that the Parliamentary Levelling Up, Housing and Communities Committee’s has launched an inquiry that will assess the financial health of providers, the impact of inflation on spending and the ability to meet government demands on housing numbers and home standards.
In launching the inquiry, Clive Betts MP (Labour, Sheffield Southeast) made the following comments, many of which could be considered to be under-statements:
“The social housing sector is in crisis. The reality is that social landlords face a range of significant financial pressures, not least the urgent need to invest in improving homes, so they are not blighted by mould, damp, and leaks. The sector must also meet the pressing demands to build thousands of new homes for social rent, decarbonise the housing stock, and fix building safety defects.
“In the committee’s inquiry, we want to understand the extent of these demands, the impact on the financial resilience of the social housing sector, and the support and resources needed to meet these challenges and ensure we have the supply of good quality social homes we need for the future.”
MPs will also question whether the Regulator of Social Housing has the necessary resources and skills to effectively regulate an increasingly complex sector. This is a good question. Since 2010 the regulator has been told to focus on the economic standards (rents, value for money and viability) and to pay attention to the consumer standards (homes, neighbourhoods and communities, tenancies, tenant involvement & empowerment, and tenant satisfaction) only where there is serious detriment. This has led to the regulator ‘fiddling with mergers, while tenants’ homes burn’. The government has now recognised that this needs to change and has done a long-overdue U-turn. However, has the regulator got the capacity to fulfil this wider brief?
And another U-turn just announced. Local authorities will be able to retain 100% of ‘right to buy’ receipts for two years – probably too little, too late!
I will be presenting webinars on local authority housing finance later in the month. For details or to make a booking, please click here.
Co-op Homes and Carnwath Road, Fulham
AWICS has been appointed as Independent Tenants’ Advisors for the Carnwath Road development by Co-op Homes.
Co-op Homes are a registered provider owning some 300 properties across London and the South East. They are also a managing agent for thirty other community housing organisations and housing co-ops, providing services to over 2,000 residents. They pride themselves on delivering an excellent management service that meets their customers' needs and expectations whilst also offering value for money.
In December 2005, they joined the Richmond Housing Partnership (RHP) Group that owns and manages some 9,000 properties in South West London.
Co-op Homes acquired the long leasehold of sixteen units at 1, 3 & 5 Carnwath Road from Shepherds Bush Housing Association in 2007 on the river Thames at Wandsworth Bridge.
Co-op Homes entered into a Tripartite Agreement on the 23rd May 2014 with the owner of the adjoining site and Hammersmith Council who are the freeholder of the site. After entering into the Tripartite Agreement, the developer obtained a planning permission on 19th December 2014. The planning permission was for 239 new homes in various buildings up to ten storeys in height with additional space for retail, restaurants, pub, wine bar, upgraded Thames path way, hard and soft landscaping, public and private open space, new public realm, pedestrian and cycle routes, car parking and cycle parking. A second planning permission was granted in December 2020 that reduced the parking on the site and increased the amount of residential units to 269 homes. The impact on Co-op for this revised planning permission was minor.
Since the site has been acquired by Promontoria Hurlingham Ltd, extensive customer engagement with existing residents has been undertaken. Meetings have been attended by representatives from the developer, the council and Co-op Homes.
Co-op Homes, the Council and the developer are committed to ensuring communication and advice to residents is impartial and fair and have therefore engaged AWICS to be the independent tenant advisor to support and advise residents impartially of the process and rights. We can be contacted on our freephone helpline at 0800-321-3054 or by email at email@example.com
During April I will be presenting some webinars. For further information or to make a booking, please click on the following links: