Sector calls for long-term stability and rent certainty

Ms Nanda said: “We need to make sure we’ve got a sustainable income, and we understand what that income is, and it’s stuck to whatever the formula is where we can look at rent convergence, and decarbonisation, all these areas, so that we can have a settlement which we can really build on. And that will help us then do the other things we need to do, which is really build the capacity.

 

“We are losing massive capacity out of the sector every day, whether that’s housing associations or house builders, it is going because there is a crisis, and we need to make sure we stop it, and then we build it up.

 

“So having that capacity and rebuilding that capacity back up into the sector will come if we have the stability going forward. That’s my ask.”

 

Speaking on the same panel, Gemma Bourne, managing director of social impact investor Big Society Capital, which over the past decade along with its partners has invested £1.4bn in social and affordable housing, said that rent certainty is also needed for investors.

 

“We’ve heard a lot about certainty of rent-setting policy; actually, for investors, that is really important, investors don’t really like risk,” she said.

 

“The more risk there is, the more return they’ll want of their capital in compensation for that risk, or actually they just won’t enter into the market at all.

 

“Stability and rent-setting policy from a private investor’s perspective, I think, is really aligned with what the sector wants.”

 

Ms Bourne also urged for stability in decarbonisation, saying that a national retrofit strategy would be “fantastic”.

 

She said Big Society Capital’s team thought they would “love” to invest in the retrofit of social and affordable housing.

 

But Ms Bourne said they have encountered a “really complex and fragmented market” with a series of pilots and no joined-up approach between different government departments.

 

“A national retrofit policy would be fantastic,” she said. “And then there’d be impact investors like us and our partners that would want to come in and support the sector with that.”

 

Speaking on the panel entitled ‘financial resilience and sustainability – defining priorities’, Sarah Jones, chief executive officer of Anchor, said that certainty, whether about rent or grants, is needed.

 

“I think we can all price things, even if it isn’t the news we wanted, if you know what it is and how long you can price it in, and we can deal with that,” said Ms Jones said.

 

She added that it would be useful to have a conversation challenging the status quo about rent over the next 30 to 50 years.

 

“Let’s have a conversation about whether that’s a green rent, what it means about affordable and social rents,” Ms Jones said. 

 

Speaking on the ‘working with government’ panel alongside Ms Nanda and Ms Bourne, Toby Lloyd, an independent housing expert and former special advisor at 10 Downing Street and former head of policy at Shelter, said that everyone would agree that stability with a new rent settlement is “definitely a good thing”.

 

However, he said he has an “unpopular” view that a settlement should cap annual increases at inflation rather than CPI plus one per cent because these rent increases are unfair on those in social housing. 

“CPI plus one [per cent], everyone loves because it’s ever rising but, at the end of the day, that is expecting the poorest people in the country to keep paying out ever higher rents on a kind of ineluctable escalator in order to provide cross-subsidy,” Mr Lloyd said.

 

“I fundamentally don’t think that’s fair. The point of social housing is to provide secure, stable, affordable housing for people who need it most and we can’t expect to keep bleeding them dry.

 

“The affordability for people in the social housing sector is really, really tight and that was before we saw the cost of living crisis and everything in the last few years. So no, I don’t think we should be accepting ever higher rents against CPI at all.

 

“Ideally, I think we should be looking for inflation-pegged rents and then having confidence that will stay that way pretty much forever. And if we can’t deal with that as a sector, then I think we have to ask what’s wrong with our business models?”

 

Speaking on a separate panel entitled ‘agreeing together a long-term outcome-based plan for housing’, two panellists together highlighted the long-term housing plan.

 

These were Charlotte Carpenter, executive director, growth and business development at Karbon Homes, and Matthew Bailes, chief executive at Paradigm Housing. They are both jointly co-chairing a National Housing Federation (NHF) group on housing.

 

Ms Carpenter said that the group is setting out a case for the next government to put in place a long-term plan for housing.

 

The NHF has been campaigning for a long-term housing plan since launching a report in June, which used research to set out the case for a plan in order to end the housing crisis.

 

For example, the group found that the number of children living in temporary accommodation has almost doubled in the past 10 years and if things are allowed to continue, this could rise from 130,000 to 310,000 over the next two decades.

 

And at the end of November, the NHF found that 42 per cent of older private renters in England regularly struggle to afford basic living costs, which the trade body put down to the “chronic lack of social housing”.

 

“It’s really clear that we need to move from a piecemeal, drip feed or ill-thought-through policy and funding announcements to a strategic, more-than-one-term-of-government, long-term plan,” Ms Carpenter said at the conference.

 

She said the group started by setting out “very high-level baskets” of outcome-based measures that the group believes should be at the “heart” of a long-term plan.

 

One is on affordability and financial risk resilience, one around housing quality, one around security of tenure, another around reaching net zero and one around the role of housing and economic growth, she said.

 

Ms Carpenter said: “People have said they are quite obvious, but despite that, we haven’t actually ever had a government that has set out a commitment to reaching these or a plan for reaching these.

 

“Our argument is to have a successful housing system, you’ve got to have a really clear commitment to what you want to deliver over the next five, 10, 20 years and this is what it should be.

 

“Once that vision’s owned we obviously want the government to commit to a coherent long-term strategy to deliver that. So how should we be making that ask? Well, I think the first step is to make housing an electoral issue.”

 

Speaking on the same panel, Melanie Leech, chief executive of the British Property Federation, said that housing should remain a priority after elections as well as in the run-up to them.

 

“Housing is an electoral issue for a few brief months before an election, it tends to be around homeownership largely and then it tends to go away again in terms of how government organises itself and the priorities it sets after an election,” she said.

 

“As others have sort of hinted at, I think there are signs that that might change this time around, that it’s now becoming such a mainstream and critical issue in so many ways that it will stay as a priority after the election.

 

“But we’ve got to hold people’s feet to the fire, we’ve got to really not let politicians off the hook around that. So, we’ve got to keep that running. But if we do manage to achieve that, that’ll be something we haven’t seen for generations.”