Social Housing Speed Read – £500m funding unlocked with Homes England – but where is it needed most?
4th February, 2019
In a speech on 31st January to the London First Building Summit, Minister for Housing, Communities and Local Government James Brokenshire announced that £497m of funding would be 'unlocked' for use.
The funding is hoped to provide for 11,000 new homes where they are needed most, through a variety of methods, but primarily through partnerships with Homes England. The minister claims the money will be distributed nationally “where it will have the biggest impact”.
“Our £500 million funding boost for housing associations will help them build thousands of extra affordable homes – including properties for social rent.”
The cash will be made available via ‘strategic partnerships’ with housing associations and Homes England. These partnerships are designed to offer associations increased flexibility in designating funding to their own priorities in their build programme, unlike other types of funding where there is no negotiation on where it is ultimately spent.
Using this method, housing associations are promised the extra government money as long as they, in turn, increase their building rates to a certain level.
Not everyone has been so positive about the announcement:
“this is not new money and is a drop in the ocean compared to the deep cuts to housing investment since 2010” said shadow Housing Secretary John Healey.
Homes England also announced a £9m deal with Apex Airspace Developments to build largely modular homes on top of rooftops in London, priced in the Help to Buy bracket.
The funding will be released to housing associations around the country; in Bromford, Liverpool, Nottingham, Walsall and Yorkshire. None of the new Strategic Partnerships will service the North East, although a large grant was given to The Guinness Partnership (Hartlepool) in the last wave of partnerships in October 2018.
A closer look at the Statistical Data Return for Registered Providers (RPs) shows that the number of housing associations and homes per area differs greatly. The number of local authorities with 40 housing associations has halved over the last three years. Whilst this has important impact nationally, on a regional level the differences are also stark. For example, for local authorities outside of London, Liverpool has 44 RPs whereas Newcastle only 23.
However, the number of housing associations themselves does not account for the numbers of properties that they own or manage. Whilst London housing associations average only 250-500 homes per organisation, Liverpool averages almost 1,200 homes per HA.
Considering the number of social houses now needed across the country, the decision to build on London rooftops is certainly a novel approach. It remains to be seen whether the promotion of airspace is particularly suited to London or whether this will eventually be rolled out to other areas. It could be argued that this move is indicative of the emphasis on private housing, as opposed to creating social housing that is very badly needed.
Adding properties onto roofs in London for private sales, whilst 1.25m families are on waiting lists for social housing may not seem the most efficient way to solve the housing crisis.
This sentiment is mirrored by Brokenshire’s statement that the funding merely ‘includes’ socially rented properties, rather than this being a primary focus.
Indeed, Chartered Institute of Housing Chief executive Terrie Alafat pointed out in response that “[their] analysis shows that 79% of the government’s housing budget goes to the private sector, with just 21% going to affordable housing”. The Government’s press-release on the announcement describes Homes England as having been ‘created to adopt a more commercial approach to respond to the long term housing challenges facing this country’. It is questionable whether that is actually what people on waiting lists need.
This new round of Strategic Partnerships is the continuation of a policy that it is hoped will produce at least 1,000 new homes by 2022.
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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