Resetting the Housing Policy Clock

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The White Paper in the spring of this year was intended to herald a new era of strategic thinking on housing policy. We then had a General Election, followed by the tragic fire at Grenfell Tower and much of the policy agenda felt as though it was put on hold.

But that’s not strictly true as much of the policy thinking had actually been completed and was nearly ready to go. So now that the new government has had time to settle, clear its head a little and has used the summer to engage leading figures in the sector in discussions.

These have ranged from greater involvement from tenants in decision making, through to the range of different types of providers that could help in accelerating housing building provision. But what should housing providers be preparing for?

Firstly, let’s look at the “knowns”

  • Our policy and economic context remains uncertain following the decision on Brexit and the commencement of negotiations to leave the EU.
  • Inflation is on the rise – we are seeing an increase in CPI and building costs, affecting the cost of building and index-linked finance. On top of this, at least until 2020, there will be no cushion of income increases via a rent increase formula.
  • The HCA will relaunch as Homes England
  • We will have a stand alone regulator implementing a de-regulatory regime
  • Fees for regulation are set to go live in October 2017
  • Value for money and peer comparisons will be part of the increased visibility on performance by Registered Providers
  • Transformation of services and operating models are likely to be key for the future – but mergers, acquisitions and partnerships will still be the main game in town.
  • Fundamental questions of ‘who do we house?’ and “what is truly affordable housing?” will be key talking points for the sector.

Then, on the other side of the coin, there are the policy “unknowns”

  • Rents post 2020 – will there be a settlement on certainty of rent increases in the autumn budget?
  • Green Paper on funding for supported housing – will we see announcements in the Autumn Budget?
  • Voluntary Right to Buy – was not explicit in the Conservative manifesto – has it been kicked into the long grass?
  • How will the roll out of the de-regulatory measures in the Housing and Planning Act impact upon how the Regulator governs and how Registered Providers run their businesses? This will include Large Scale Voluntary Transfers, for whom the implementation of Section 93 of the Act, could see a a fundamental change in the control that can be exercised by a local authority on a housing association’s activities.
  • Will the sale of LA high value assets go ahead – or has this pre-election initiative also be assigned to the long grass?
  • Will the growing calls for councils to get more financial flexibility, to enable them to build more, be heeded?
  • We can expect the continued roll out of planned welfare reforms, but will austerity and welfare cuts be softened? Phillip Hammond has suggested so, but if so, in what form?
  • The impact of Grenfell on the social housing sector –
    • on tenant engagement and relationships
    • on the relative priority of new supply and investment in existing stock
    • will cast a spotlight on governance and decision making along the whole of the supply chain.

One thing we can be certain of is that the pressure to increase the supply of all forms of housing is still at crisis levels and needs long term sustained intervention by all those involved in the provision of housing. The GLA, as before has continued with its agenda for change and this week launched its own housing strategy. Devolution has not gone away, and many regions will develop their own strategies over the coming months and years.

There is much for Boards and executives to get their head around, as we move into autumn and strategic planning board away days. The board away day season is a chance for housing providers to make their own decisions on some of these issues, to prepare their responses and to truly own the delivery of their mission.

If we can help you on any of these issues
please contact any members of the Altair team:
info@nullaltairltd.co.uk / 0207 934 0175

Gemma Duggan and Steve Douglas