Exporting the UK affordable housing sector in a post-Brexit world
Affordable housing in the UK is by no means perfect, in fact various estimates suggest that between 1997 and 2017 there was an overall deficit of 600k new homes compared to UK Government targets.
This does however hide the fact that the UK has one of most well-established social housing systems in the world, which has been in existence for over 100 years. Over that time many new initiatives have been tried and many lessons can be learned by other countries seeking to develop or boost their own affordable housing programmes.
As we now approach a post-Brexit environment, the UK is increasingly looking for new export sectors which can extend our influence and links beyond the European Union.
To date, the UK affordable housing sector has been just that – the ‘UK’ affordable housing sector, with limited, if any, influence beyond these shores. But with such a well-established sector in place and a huge amount of knowledge and value to offer, there are opportunities to increase the profile of the sector on the global stage.
This does not necessarily need to mean that UK housing associations should become international businesses. But rather there are softer skills, knowledge, experience and expertise which can be leveraged and used to support the development of affordable housing programmes in other countries.
What are the key lessons that can be learned from the UK sector, what can other countries learn and apply to their own environments? Some key points include:
- Focus on developing the whole housing system – Any housing market intervention will only be successful if the whole system is stable. This includes: ensuring that there is sufficient demand with sufficient financing in place; welfare systems are robust and in place to support those in need; housebuilders are able to develop at scale and there is a resilient supply chain in place; and there is access to capital markets to fund new building, and a strong regulatory / policy environment to manage homes.
- There is a need for a diverse range of players – A housing market needs a range of actors in place to develop housing. In addition to government there is also a need for local government bodies, charities, independent organisations, and the private sector to all play a role in the development of new homes.
- Robust regulation is essential – This is not only to ensure that the provision and ongoing management of housing is completed to a high standard, but it also provides confidence to lenders, that there is a resilient regulatory environment in place to provide assurance that any investment will be managed effectively.
- Ensure sufficient focus on long term maintenance – A key challenge will be in ensuring that there is access to funding in place to finance the initial development costs of new homes. However, there should also be sufficient focus on how the longer-term maintenance and management costs of those new homes will be financed. This is most likely to come from rental income, so there is a need to ensure that the market is strong enough to support those ongoing costs and / or there is access to government support on subsidising rent.
- Innovation is key – There is no one size fits all; tactical interventions that work in one place won’t be effective in all environments. Likewise, as the social, political and economic environment adjusts, there is a need to continually review and design new housing interventions, as well as continually innovating in the way homes are built – improving areas such as sustainability, cost of build, climate impact, carbon footprint etc.
In each of these areas (developing housing institutions, embedding robust regulation, financing the long-term management and maintenance of homes and innovating in service delivery), the UK can provide a huge amount of knowledge and skills.
The opportunity within all of this is that in a post-Brexit world, the UK affordable housing sector (and specifically the individuals, institutions and actors which operate in it) has a huge opportunity to not only help the UK to refresh and renew its image on the world stage, but also support other countries who are at a much earlier point in the development of their own affordable housing sectors.
Altair International is dedicated to helping create and finance affordable housing and infrastructure projects for the growing urban communities in developing countries
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