Housing associations' ability to meet government development targets could be thwarted by their inability to raise enough funds
A long-awaited report by the National Housing Federation has revealed that some associations may be unable borrow the money needed for the large-scale, long-term development pledged in the Communities Plan and required to get stock up to the decent homes target.

The report, Balance Sheet Capacity, was unveiled at the NHF annual conference on Thursday. It looked at the ability of 150 registered social landlords to borrow money to invest in growth during the next 30 years. This would involve building more homes than already planned or providing more services such as neighbourhood warden schemes.

The study said most of the 195 or so medium-sized RSLs – those with 2500-10,000 homes – will be unable to expand beyond their present plans.

Southern associations have plenty of capacity to grow, but the central region is "weak to the point. Transfer associations will also have limited capacity to expand over the next five years.

It would be silly if the corporation had a list of developers and found they couldn’t develop in 10 years

Bob Wilson, National Housing Federation

NHF finance policy officer Bob Wilson said the government must look at its rent restructuring and housing benefit reform policies, which could limit the amount of money RSLs have to invest.

The report revealed that the housing associations with the greatest unused financial capacity were the smaller RSLs. However, the Housing Corporation wants to keep the number of developing RSLs to a shortlist of larger players, rather than encouraging development across the board.

Wilson said: "It's important that the RSLs that can develop are the ones looked upon by the corporation as developers. It would be silly if the corporation had a list of developers and found they were the ones who couldn't develop in 10 years' time."

David Montague, group finance director of London & Quadrant, said the study could be a further impetus for small RSLs to partner, merge with large associations or join group structures. "Somehow the new partnering agenda needs to make sure that capacity isn't lost in associations that are not making use of it," he said.

Source

Housing Today