Pressure on Delivering Affordable Housing Remains Immense
The expectation on the affordable housing sector is higher than ever. Whatever persuasion the UK Government has, the building of affordable apartments and homes will be central to their domestic strategy.
Pressure on new housing delivery in the face of a slowing housing market remains immense, not least due to the uncertainty of Brexit. This, and the long shadow of the Grenfell tragedy, the Social Housing Green Paper, the Hackitt Review and the likely review of the Decent Homes Standard, have led to a sustained focus on compliance of existing stock.
Set against these imposing factors, there are inevitably excellent new opportunities in the sector.
Perhaps most notable is the potential increase in delivery from local authorities following the lifting of the Housing Association debt cap. Around the UK it seems that over 70% of local authorities are planning to increase their delivery of affordable homes, which is a significant increase.
The rise of For Profit Registered Providers (RP’s) has also attracted attention. Sage, the Blackstone backed vehicle, has started to build real scale and Legal & General Capital has entered the sector with big ambition.
Many involved in the housing sector recognise that RP’s have a large role to play in solving the housing crisis, providing they remain focused on tenant welfare.
New methods of construction also represent a big opportunity. Places for People and many others are involved in modular housing and new entrants are coming into that field almost monthly. They are attracting significant investment and it is likely that the housing sector will see an increase in this type of purpose built accommodation over the next five years.
In addition, a number of Affordable Housing entities are also creating private built to rent (PRS) brands, some with more success than others.
In spite of central and local government encouragement, substantial sums becoming available for development and major new entrants coming into the field, there are still several challenges to overcome.
As the sector increasingly looks to move from Section 106 to land-led development, availability of land remains the single largest factor impeding increased housing delivery. Skills and organisational capacity will remain a challenge, as the Brexit implications for labour movement remain very uncertain.
Lack of funding can inhibit development. Financing sources are varied and numerous but for significant sums there is a clear role for government here and Homes England are fast becoming vital to the sector.
Partnerships have been active in the sector and the private sector interest is increasing both from a funding, investment and practical perspective. Whether these are within the sector, with government bodies or with private partners, well-delivered partnerships have clearly shown that they spread risk, unlock opportunity and accelerate delivery – factors that are required at all times of the cycle.
Five years ago, Affordable Housing was seen a bureaucratic and sleepy bookend of the real estate sector. During that period a number of developers have become significant across the UK and have attracted high quality people from the private sector, in many cases motivated by a strong sense of social purpose. The Affordable Housing sector will continue to evolve – adapting to fulfil its critical role in housebuilding for wider society.
The psd Property & Construction Practice works with Affordable Housing organisations and RP’s right across the UK at senior management and board level. We can advise on organisational structure, remuneration policy as well as delivering both Executive Search and Contingency Search assignments, often accessing a wide pool of private sector individuals as well as Affordable Housing industry veterans.
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Peter leads psd‘s work in the Property & Construction sector. He recruits senior and board level positions in development, construction, fund management, private equity, property services, PRS and affordable housing.
He is also Head of psd‘s global HR practice, recruiting senior and board level positions across all sectors.