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28/11/2016

Report: Housing associations could double new homes

Words: Laura Edgar
Brick laying / Shutterstock_462881611

English housing associations have the financial capacity to bring forward double the number of homes that they currently do.

Releasing Untapped Potential For More Housing, a report by property adviser Savills, states that delivering twice the number of homes would deliver up to 84,000 homes a year by 2029.

That means housing associations could deliver 44,000 extra homes a year in just over a decade through additional borrowing against existing assets and a greater partnership across the sector, says the study.

But some form of subsidy is “critical” to deliver these homes across a range of tenures including affordable housing.

In the absence of additional funding, housing associations would need to secure land at zero or low value to be able to build shared ownership homes of affordable rented housing, it adds.

Following last week’s Autumn Statement, in which the government committed £2.3 billion to a Housing Infrastructure fund and £1.4 billion to providing 40,000 affordable new homes, Chris Buckle, associate director of residential research at Savills, said there is “clearly a desire” by the government boost house building in areas of greatest need and to support new housing across a range of tenures.

“Our work shows that there is huge untapped potential for housing associations to do even more and fill the gaps left by the private sector.”

The company said other research (pdf of table from research) it has conducted assessed that the sector could access £7.4 billion of additional borrowing against existing assets.

This new report models how many new homes this could finance in addition to current housing association activity.

“The message from the Autumn Statement is a great start, but with bolder ambition we can really increase the number of homes being built, spread across a range of tenures,” says Robert Grundy, head of housing at Savills.

“Housing associations are uniquely well placed both to boost delivery and to manage portfolios of rented and shared ownership homes.

“Increasing delivery rates is a long game and it will take a number of years for the sector to transition into the development space as many become more accustomed to operating with greater risk and market exposure.”

Image credit | Shutterstock

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