70% of councils set to ramp up delivery of affordable homes
Seventy per cent of local authorities plan to ramp up their delivery of affordable homes, with a quarter expecting a big increase, new research has found.
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More than 80 per cent of councils expect to work with or are considering a partnership with housing associations over the next five years, while almost two-thirds still cite financial capacity as their main constraint, despite the lifting of the borrowing cap.
The findings form part of this year’s Housing Sector Survey (linked below), which was conducted by Savills in partnership with Social Housing magazine and is set to formally launch today (25 June) at Housing 2019, the Chartered Institute of Housing’s annual conference and exhibition in Manchester.
Now in its third year, the sector’s biggest survey of this kind gathered responses from senior people at more than 250 housing associations and councils – including 130-plus associations – and polled 500 housing professionals across the sector.
The survey found that 84 per cent of senior housing leaders from housing associations and councils said they see the provision of social rented homes as a top priority, up from 65 per cent last year. And nine in 10 believe that estate regeneration has a role to play in solving the housing crisis.
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It also found that just over half of respondents now believe too little is being done to maintain existing homes, up from 35 per cent in 2017.
Despite this, the majority (54 per cent) see building more homes as more important than investing in existing homes and communities.
Eighty-four per cent of senior housing professionals see the provision of social rented homes as a top priority, up from 65 per cent last year.
And while the UK’s pending departure from the EU continues to cause uncertainty, only a third say a Brexit-related market downturn would affect their development activities, although this is up from 27 per cent last year.
Robert Grundy, head of housing at Savills, said: “There is more expectation on the social housing sector than at any time in recent memory.
“The results from our 2019 survey reveal that there are also exciting new opportunities in the sector. Perhaps the most notable is the potential increase in delivery from local authorities following the lifting of the [Housing Revenue Account] debt cap.”
This includes pressure on new housing delivery in the face of a slowing housing market and the uncertainty of Brexit.
He said that the “long shadow of the Grenfell tragedy”, the Social Housing Green Paper, the Hackitt Review and the likely review of the Decent Homes Standard have led to a sustained focus on health and safety compliance of existing stock.
Related Files
Savills Housing Sector Survey 2019.pdfPDF, 12.8 MB
The survey also asked respondents for their views on new players in the social housing sector, namely for-profit registered providers.
Despite reports of concerns over competition in the Section 106 market in particular, the latest survey found that 72 per cent of the social housing sector believe for-profit housing providers have a role to play in solving the country’s housing crisis.
However, almost two-thirds believe they are not as concerned with tenant welfare as traditional housing associations.
Other areas of focus of the survey include land and new ways to deliver homes.
The number of housing associations holding strategic land has remained flat over the years, but the volume they hold has increased.
There are changes afoot in the way the sector delivers homes as well. Sixty-nine per cent of respondents said they would use modern methods of construction for 10 to 50 per cent of their homes in five years’ time – which compares with 21 per cent at present.
The research consists of two surveys and two focus groups.
The sentiment survey collects more than 500 responses from housing professionals and the capacity survey had responses from 250 director-level people or equivalent at housing associations and councils.
Two focus groups made up of capacity survey respondents discussed both surveys.
Social Housing special reports
Each month Social Housing focuses on a specific aspect of housing finance and collates and scrutinises the data for hundreds of housing organisations.
The reports below contain unparalleled commentary and analysis along with detailed sortable and searchable data tables.
Unit costs 2019 Our analysis of data from the English regulator has found that unit costs have risen among all types of housing association, with overall maintenance costs seeing the highest weighted average increase of nearly seven per cent
Impairment 2019 Housing associations’ impairments rise almost 40% in a year, driven by fire safety costs, contractor insolvencies and reduced land values
Global accounts 2018/19 Housing associations’ surplus for the year before tax decreased by five per cent to £3.76bn, driven by a 6.6 per cent drop in England
Affordable rent profile 2018/19 The level of affordable lettings dropped for the third year in a row
Staff pay Data from audited accounts of 206 housing associations shows that average staff pay in 2018/19 was £31,787 – a rise of 3.2 per cent over a 12-month period
Professionals’ league Our exclusive professionals’ league finds that activity continued apace in 2019, when housing associations increasingly looked to private placements
Sales proceeds Despite a 10 per cent rise in housing associations’ income from development sales in the last financial year, sales revenue is likely to remain flat over the coming years as a result of the property market downturn
Capital commitments The total capital commitments of 200 housing associations rose by 15 per cent in the past year, analysis by Social Housing has found
Reliance on sales surplus Social Housing finds that the total sales surplus of 150 English registered providers has dropped by nearly 10 per cent, as a result of lower market sales surplus
Stock dispersal How many council areas does your housing association operate in? How concentrated is its stock?
Accounts digest 2018/19 How does your housing association’s finances compare to others?
Housing Revenue Account part two How do councils compare in their 2018/19 Housing Revenue Account positions? Steve Partridge of Savills takes an in-depth look
Diversification of income We look at how housing associations are diversifying their income, and finds that they made 10.3 per cent more revenue from shared ownership and non-social housing activity
Impairment 2017/18 Social Housing takes a close look at the accounts of the 130 largest housing associations, and finds that impairments rose by nearly a third to £78.4m in 2018
Global accounts Social Housing’s analysis of the sector’s global accounts finds that housing associations’ pre-tax surplus fell last year – driven by drops in England, Scotland and Wales (August 2019)
Affordable rent profile We find that the number of affordable rent lettings recorded last year by housing associations in England has dropped for the second year in a row, suggesting that the sector is shifting away from the tenure
Capital commitments We scrutinise the capital commitments of the 208 largest housing associations in the UK (June 2019)
Housing Revenue Account part one Steve Partridge of Savills takes a look at the financial factors councils should consider in their Housing Revenue Account business planning (May 2019)
Reliance on sales surplus Our analysis reveals that profits form 42 per cent of 150 English housing associations’ total surplus (April 2019)
Sales proceeds We look at housing associations’ build-for-sale income and find a two per cent increase in 2017/18 (March 2019)
Shared ownership sales England, excluding London, has seen a four per cent rise in shared ownership sales – much lower than last year’s 16 per cent increase (February 2019)
Stock dispersal We show that housing associations’ general needs stock is becoming more concentrated within their local authority areas (January 2019)
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