RSLs 'could raise £12bn in next 30 years to build 92,000 homes'

Registered social landlords could raise £12bn of extra private funding over the next 30 years to invest in housebuilding – enough to build 92,000 homes.

That was the message on Wednesday from David Montague, finance director at London & Quadrant Housing Trust. It followed calls in economist Kate Barker's report on UK housing supply, published the same day, for RSLs to up social housebuilding by 23,000 units a year.

Montague said the savings could be made if RSLs reduced their average management costs to £430 per home per year – the level that L&Q presently achieves. Other RSLs' average management cost is £700 per home per year. Some associations have far higher costs.

Mergers would also be necessary to reduce overall costs further, Montague said. "It's more difficult for small and medium RSLs to get costs down. That's where consolidation comes in."

Housing Corporation chair Peter Dixon said: "Over time there is the capacity for associations to increase the amount they borrow. We may have to squeeze more efficiencies from RSLs so they have greater surpluses to fund debt repayments." He added that the corporation would also consider allowing associations to raise rents to cover debt repayments.

He would not be drawn on precisely how many homes RSLs could build. But he said bids for the £3bn new approach to investment set to be unveiled next Tuesday, which will see much of the money set aside for larger associations, had been for double the 67,000-home programme set to be signed off by the ODPM.

However Jon Watson, director of business strategy at Home Group, said: "I don't agree that there is more capacity in RSLs' balance sheets. We are facing some real pressures."

Housing professionals from outside the South-east were concerned that Barker said little about conditions in their regions.

Housing consultant Jim Battle said: "We need some similar account of markets in the North and Midlands that have been put under stress by changing economic and social environments."

And Conservatives questioned the Barker Report's economic basis. John Hayes, shadow minister for housing and planning, said: "The census shows there are 900,000 less people than the government predicted. Therefore [the review's] foundations are shaky."