Instead, their Boards hear of the improved quality of homes resulting from planned major investment. They also see a healthy surplus shown in the accounts that’s no threat to previous loan covenants, and a long way to their maximum level of gearing. They hear of satisfied tenants scrutinising performance and engaged with improving services.
It is ships such as these, sailing steadily on course, that regulators across the UK would like to encourage to do more new development.
We understand there are obstacles to this, there are many risks involved, little in the way of public subsidy and there may be a lack of experience and knowledge alongside a worry about risk.
Yet we all understand that the housing need in some areas is acute and homelessness on the rise. We also believe that with encouragement, and the sharing of best practice, Registered Providers can continue seeing the provision of more homes as part of their core mission.
We can see there is work to be done to expose and mitigate the risks associated with development and set these out clearly and measurably, particularly for some smaller associations and those that have not developed new homes in some time.
There are many ways to mitigate risk. One way is through successful partnerships and consortia such as the New River Alliance and Connected Partnership in London. Both met all their targets in the last grant programme and have been congratulated and lauded by their funders. The New River Alliance is led by Islington and Shoreditch HA with up to 11 other housing associations benefiting from the alliance which is developing 500 new homes. At Connected Partnerships; Octavia Hill, Origin and Shepherds Bush acted as development partners for Ducane housing association, Harrow Churches and Stoll housing association, and did just as well.
In both examples, new homes have been built and partners in the consortia with less development experience, but with financial capacity, have been able to contribute to creating new homes. This type of model is ready for further growth and replication.
In London there are specific funds available that particularly suit smaller and specialist organisations, and the GLA is willing to step in and offer real hands on support to see the bid through to an allocation of grant, so new specialist schemes can be developed through Platform for Life and Homeless Change funding.
Across the country, associations will be considering whether to develop in partnership or independently. Some Registered Providers may guard their autonomy and wish to develop alone, using their own sites and appointing consultants from architects to Employers’ Agents and development consultants as required. This keeps the Registered Provider in control and ensures it is developing its assets to maximise homes and provide value for money. Others will look at development through development agents, to mitigate or share the risk.
There are a range of working models available to explore which can help facilitate future growth, and since the pressure will be on all associations to contribute to building new homes, no matter what size or level of development expertise they have, it is essential that all Registered Providers take the opportunities available to explore options for delivery.