As Altair Ltd celebrates its 10th anniversary we contemplate what the next decade will demand of the housing sector
Reflecting on 10 years of work, we’re proud of our impact and support provided to organisations in the social and affordable housing and related sectors. This has included working on some of the big challenges impacting on the sector.
Many milestones and changes have shaped the housing sector since 2010: The Cosmopolitan Report reformed governance and regulation; we have seen increasing diversity of business models across the sector; rent reduction; digitalisation of operations and services; the ongoing tragedy of Grenfell; and a corresponding, greater focus on tenant voice, for example. All this prior to the global pandemic. Through the last 11 months we have learnt that the sector is resilient and versatile, while the pace of change accelerates exponentially. By 2030 we will likely be charting a very different environment.
But what does the future hold? We approached our expert housing team for their assessment of the direction of travel in the years ahead.
Consumer standards and service excellence
Expectations of tenants will have increased, and rightly so. Although housing organisations tend to provide a product of need rather than choice, everyone who accesses their services is a customer and their experience must reflect that. Just as Amazon provides a seamless experience, so too will the housing sector. As we see a shift to tenants having a choice of landlord, so landlords will have to raise their standards to retain their tenants.
New smart tech will be instrumental in enabling organisations to provide more efficient services. Tenants will be connected, informed, and aligned through a more purposeful dialogue with their landlords and the community beyond. Individuals’ needs are to be fully understood, and expectations both clear and met, in a world in which sustainability will be paramount.
Consolidation and competition
There will be far fewer providers. Driven by operating costs, investment in IT, asset management costs (and building safety for those in cities), competition (driven by increased choice) as well as the Regulator starting to use its VfM stick, consolidation will unavoidably increase over the next decade. Those organisations with performance challenges will be incorporated into others.
Decentralisation and manufactured homes
Almost overnight, the pandemic has changed the need for many of us to be in the city. As a society we have become more dependent on our home environment. With this increasing de-urbanisation, significant changes are afoot.
By 2030 market towns will be thriving once again. High streets will have been revived to service and support multigenerational communities. There will be significant investment from the public sector in these areas. With the move away from cities, any decrease in the cost of land will facilitate an improvement in the quality of build.
Off Site Manufactured homes will be more cost effective than traditional construction. Further investment from new sources, such as flat pack furniture provider, Ikea, teaming up with Worthing Council, and developments in 3D printing, will only accelerate this change in ways that mirror the IT revolution of the 2000s.
Real provision for older people
As in Australia and New Zealand, attitudes towards, and demand for, retirement communities, will have revolutionised. They will be built within wider mixed communities with a variety of support that allows people to live safely, happily, and independently throughout their later years. Isolation and loneliness will be a concern that the housing sector will have addressed.
A new breed of young professionals
The skillsets required for the future of work will have evolved. We will share our workplaces with artificial intelligences and bots. Apprenticeships and distanced learning through work will be more popular than graduate schemes. The workforce will be more inclusive, diverse and reflect the communities it serves.
An evolution of finance
There will be big changes to the grant regime. Since Civitas launched on the stock market in 2016, we have seen the introduction of social housing investment opportunities. The seemingly ever-increasing funding gap from government has created a unique market opportunity for investment funds. We will start to see a trend of more organisations listing to secure new investment and providing stable and long-term returns.
As the for-profit providers mature and get access to good funding options, they will also start to acquire other smaller providers, which will increase their investment stability and prospects.
Emerging international housing businesses from the UK
Larger organisations in the sector will continue to look for opportunities growth and diversification. For some this will include expanding the range of services provided to customers in the UK. Others will look at alternative markets and become international affordable housing organisations, supporting the development and management of new housing in emerging economies across the world. This will take advantage of the vast expertise we have in the UK on affordable housing and will be aligned to the UK’s post-Brexit growth strategies where it will be seeking to export new services to new markets.
There is no pre-existing road map for what comes next. And the absence of a plan provides the social housing sector with a real opportunity to shape the future. The next decade will be one of evolution and growth to a new landscape of fewer yet diverse, customer-centric housing providers, possibly listed on the stock market, and providing excellent service to compete for customers.
Throughout this change the challenge of building enough homes will likely remain.
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