Paul Yates, Chief Executive of Crown Simmons Housing, recently wrote a guest Blog for the National Housing Federation on the role of smaller housing associations in developing new homes.
30 May 2017
The National Housing Federation has recently been working with smaller housing associations to increase their capacity to build new homes and to identify barriers that prevent some from taking the plunge.
Some of the issues identified are pretty much the same as for much larger associations, such as the availability of land and delays in planning (and at Crown Simmons Housing we have had issues with both). But organisational capacity, skills, experience and attitude to risk on boards are perhaps more important factors as to why some smaller associations are not developing. It certainly isn’t lack of availability of finance with a number of institutions willing to provide funding on attractive terms.
Crown Simmons Housing operates in very high value property areas in the South East. Our base in Elmbridge in Surrey has the most expensive property prices in England outside London and there is huge demand for affordable housing in our area with limited new supply. Competition with the private sector for land is extremely tough and the small sites we favour are usually out of our reach. So our focus is currently on opportunities provided by sites we already own, working in partnership with local authorities and smaller local developers.
In 2014 we merged with another small association with the aim of building an organisation with greater financial capacity and resilience to achieve much more than either could have alone. We are now really seeing the benefits of this merger coming through. Having got through the initial wobble brought about by rent reduction in 2015, we are developing again and will be adding to the 171 homes we have built over the last 15 years. Our business plan has capacity to grow by a further 130 homes (around 18%) over the next five years. We will be starting work on at least one site this year (hopefully two) that will produce 39 new homes in Elmbridge.
We also see stock acquisition from other landlords as an opportunity as rationalisation in the sector gathers pace. While this doesn’t immediately lead to new supply, the proceeds of such transactions make a wider contribution when used by the selling organisations to develop new homes in areas that make more geographic sense for them. Such deals are likely to be attractive to smaller housing associations as they are less risky than new development and produce rental income from day one.
I know of many smaller housing associations that are making a difference in their neighbourhoods and making valuable contributions. If all small housing associations were looking to grow by 18% over the next five years this would make a sizable contribution to new supply in this country.