THOMSON ASSOCIATES
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Regeneration - Housing Associations

In 2007, 2008 and 2009 the Social Housing Movement with the backing of the Housing Corporation and then its successor, the Homes and Communities Agency, was able to maintain development by changing grant for shared ownership to that for social renting and bringing forward future grant funds. One of the earliest acts of the coalition Government was to hugely reduce the amount of available grant funding for social housing developments by close on five billion pounds over the period 2011 to 2015. This means that average grants are much less, perhaps around 20-25%, rather than 40-50% previously.

Regeneration, certainly in the worst areas of the north, has now virtually ground to a halt. Some schemes are continuing, but very few are starting, and the mechanisms necessary for making these happen in an economic recession by pulling all relevant parties very closely together are simply not really in place. It is debatable, at best, as to whether regeneration in the old cotton towns around the north of Manchester will ever be possible on a large scale again and all the substantial pioneer organisations in the pathfinder areas have either disbanded or are being hugely reduced in size and scope.

Housing associations are continuing to develop with reduced grant in the approved programme (ADP) up until 2015 and are still looking for sites. They are often the only game in town and, partly as a consequence, the amount which they are able to offer for land purchase and to enable a contractor/developer to make a profit are much reduced.

There is no determination as we write (December 2012) as to whether the Government will continue with a capital grant aided regime beyond 2015. The HCA has yet offered little guidance and has even indicated there will be none until the next spending review in 2013 at the earliest. The likelihood is that the present, rather complex, model of using asset management, investment and rents, would continue, possibly/probably with some grant aid, but there would almost definitely be no return to the old model of capital grant at high level.

There is quite a lot of Government pressure on its own departments and on Local Authorities to use public land more effectively and whilst most of this which can be developed for residential purposes would probably make its way to housing associations, some will go directly to developers, particularly where market rented programmes are envisaged. Having taken away the good grants and made the system much more problematical, the HCA is conversely issuing warnings about under-performing registered providers (housing associations) within the Affordable Homes Programme. They are threatening to take away grant where performance is poor, but given how small this is of between 20% and 30% some associations may well get there first and simply hand it back anyway.

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