The Prime Minister Theresa May has confirmed that £2 billion in new funding will be given to housing associations to give them the long term certainty they need to deliver tens of thousands of new affordable and social homes.
Addressing the National Housing Federation Summit, May said that housing associations have a central role to play in helping to provide new homes where they are most needed.
She also set out the steps that the Government has already taken to respond to the needs of the sector, including providing long term certainty on rents and agreeing not to extend the local housing allowance cap to the social sector.
She pointed out that eight housing associations have already been given long term funding deals worth almost £600 million and paving the way for almost 15,000 new affordable homes.
‘I can announce that new longer term partnerships will be opened up to the most ambitious housing associations through a ground breaking £2 billion initiative. Under the scheme, associations will be able to apply for funding stretching as far ahead as 2028/2029, the first time any Government has offered housing associations such long term certainty,’ she told the meeting in central London.
She pointed out that it will give housing associations the stability they need to get tens of thousands of affordable and social homes built where they are needed most, and make it easier for them to leverage the private finance they need to build many more.
In return, she wants housing associations to use their unique combination of qualities, from their close ties with local communities to their expertise as property managers and their ability to ride out the business cycle and carry on building, to achieve things neither private developers nor local authorities are capable of doing.
‘Rather than simply acquiring a proportion of the properties commercial developers build, I want to see housing associations taking on and leading major developments themselves. Because creating the kind of large scale, high-quality developments this country needs requires a special kind of leadership,’ said May.
She believes that, given the right tools and the right support, housing associations can act as strategic, long term investors in the kind of high quality homes that are needed, and she called on them to use their ‘unique status, rich history and social mission’ to change the way tenants and society as a whole view social housing.
‘For many people, a certain stigma still clings to social housing. Some residents feel marginalised and overlooked, and are ashamed to share the fact that their home belongs to a housing association or local authority,’ May told the audience.
‘And on the outside, many people in society, including too many politicians, continue to look down on social housing and, by extension, the people who call it their home. We should never see social housing as something that need simply be “good enough”, nor think that the people who live in it should be grateful for their safety net and expect no better,’ she added.
Jackie Bennett, director of mortgages at UK Finance, welcomed the announcement and said that it provides much needed certainty regarding the Government’s commitment to the social housing sector, enabling housing associations and their private funders to plan and build for the future.
‘Affordable housing across the UK is an economic and social priority and lenders are committed to playing their part. The industry provided £8.6 billion of private finance for social housing in 2017, helping to fund affordable homes across the country,’ she explained.
‘UK Finance and its members now stand ready to work with the Government and housing associations to support long term investment in affordable homes,’ she added.
The National Federation of Builders (NFB) also welcomed the extra funding, but criticised the fact that the funding cannot be accessed until 2022 and said that more still needs to be done to address planning issues.
Richard Beresford, NFB chief executive, explained that housing associations play a key role in diversifying the housing market, as well as delivering a wide range of site but, typically partnering with small and medium sized builders (SMEs), they experience many of the same barriers to building that the non-volume sector faces.
‘Extra funding for £2 billion is extremely welcome, but it will not be accessible until 2022, it will not fix the inefficient planning process and does little to dispel the negative myths around social housing,’ he said.
