For-profits respond to NHF boss’s claim they are ‘not answer’ to social housing crisis

“For-profit [registered providers] play a crucial role in providing the investment needed to deliver social and affordable housing at scale, without placing a significant burden on public money.

“As England’s largest provider of newly built affordable housing for the last four years and having delivered 18,500 affordable homes to date, Sage Homes is the best example of this model working and benefitting thousands of people across the country.”

Simon Century, head of capital investing at Legal & General (L&G), which has nine for-profit providers, said that with a need for 145,000 affordable homes a year, housing associations “cannot meet the shortfall the country faces alone”.

He said: “Housing associations have played an enormous role in delivering affordable housing for decades and will continue to play a pivotal part.

“However, they face huge financial pressures that have severely limited their capacity to deliver on the scale that is needed.  

“Investing people’s pensions has helped to fill this gap in recent years, becoming an absolutely key plank of new social and affordable housing delivery.

“In most cases, these pensions, whether they’re public sector, local government schemes or individuals, are being channelled through so-called for-profit registered providers.”

Research from L&G last year put housing associations’ maximum sustainable output at around 40,000 homes a year at best, even with a longer-term rent settlement and a renewed affordable housing grant programme.

Mr Century added: “We now need to face into the reality of this situation together, building a unified long-term strategy and treating housing as the long-term infrastructure the country needs.”

Ian Fletcher, director of policy at trade body the British Property Federation (BPF), said “any realistic pursuit of 1.5 million homes will require open-mindedness, partnerships and collaboration”.

He said: “Housing associations will play an extremely important part in helping tackle our housing shortage, and I think they are as confident of their future as they are proud of their past.

“As the representative of a trade association, it is not for me to tell individual housing providers what business model to use.

“Of course, private capital has been part of the housing association sector for the past 30 years or so in the form of debt, and an increasing number of housing associations are now working well in partnership with private capital in the form of equity, and that is their choice, just as some will choose not to.

“More generally, any realistic pursuit of 1.5 million homes will require open-mindedness, partnerships and collaboration. I spent a very positive Thursday afternoon in a room with around 100 representatives from housing associations and the private sector where innovation and partnership were the watch words.

“The housing sector will only meet the government’s objectives if it is working together, drawing on all tenures and all forms of capital, for all purposes, and I suspect the government will only wholeheartedly support the sector if it does.”

Ms Henderson also told the committee last week there was talk of “wholesale privatisation” of housing association homes, and added that the NHF would “strongly oppose” this.

Social Housing understands Ms Henderson was referring to an article on media platform Substack last November by Sir John Kingman, the chair of Legal & General and Barclays’ UK retail bank.

Mr Fletcher told Social Housing that “wholesale privatisation” was a “great soundbite, but is never on the cards, as it is housing associations that will make their own decisions, not investors or trade bodies”.

“Where I would be concerned is if such remarks reflected a rejection of all forms of private investment, because that would be out of step with what the sector is doing and the need for all parts of the ecosystem to step up to the housing crisis that we face,” he said.

The BPF, L&G and Sage all highlighted to the select committee in 2023 that not-for-profits do not have the capacity to meet the UK’s long-term demand for affordable housing on their own.