Development plans soar despite anxiety over land availability

Latest RSM survey sees strategic alliances as the future – with ‘borrow and build’ councils engaging associations to manage new stock.

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A ‘land rush’ boosted by grants and borrowings could push housing associations into strategic partnerships with councils looking to build homes of their own again.

Just 17% of associations responding RSM’s Health of the Social Housing Sector 2019 survey felt the return of council house building would have a negative impact on their housing associations.

But Keith Ward, RSM’s head of social housing, said council ‘borrow and build’ powers offered another dimension to the development mix – with the potential for market-shifting strategic alliances.

He said: “If local authorities look to develop their own housing stock there could be a run on land availability, grants and borrowings – demonstrating a future risk for housing associations looking to develop.

“Although it may inhibit housing association development, it could lead to more strategic alliances where local authorities engage housing associations to manage new housing stock on their behalf, presenting an alternative funding stream for housing associations.”

According to the survey, over half (53%) of housing associations are still considering low-cost home ownership developments; but fewer plan to develop market sales properties – highlighting a 42% drop in planned activity in this space when compared to last year’s findings at 42%.

Despite government support, in England, most believe improving the availability of land (71%), government funding (74%) and the planning system would elevate constraints affected the size of future developments.

The survey shows a majority of housing associations plan to increase development in the medium term, despite acute concern to the short-term possible impacts of Brexit, demonstrating overall optimism across the social housing sector.

These findings highlight 82% of housing associations in England and 44% of housing associations in Scotland (RSL) as planning to increase development over the next four years.

Ward said that, as a response to the government announcements to increase rents after 2020, it not surprising to see most housing associations looking to increase development plans for both social homes and affordable homes.

“The move away from market sales properties highlights an increased understanding of the risk of this diversification from core activities; and, in part, the forthcoming impact of Brexit,” he said.

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