25 April 2019 | Firm news | Article by Emma Poole
The housing crisis is simple; there aren’t enough affordable homes to go around. According to the 2017 British Social Attitudes Survey, Housing Associations have been cited as the group most likely to help Britain out of the current housing crisis, ahead of government, private landlords and local authorities.
The Welsh Government seems to agree, setting a target of 20,000 affordable homes to be built by 2021. Building more homes seems a simple solution but it is an ambitious target. This is leading to conversations in the sector about collaborative working, strategic alliances and mergers to pool resources but this is also giving the sector an opportunity to debate its purpose and objectives and consider whether creating “profit for purpose”, whereby commercial ventures create a revenue stream to plough back into communities, might be a viable option.
Caroline O’Flaherty, Partner:
"The Private Rented Sector is challenging. The Fizzy Living model is an exemplar of how housing associations can use their skills and values to deliver safe homes of a high standard to meet growing demand. Hugh James has welcomed this opportunity to discuss with our clients the possibilities it raises for the sector and to explore the differences between the English and Welsh markets."
This is set against a background of an increasingly fragmented private rented sector. Over 98% of private rented stock is currently owned by individual landlords and small corporate entities, some of which is of poor quality and badly administered. The result is a cycle of community decline linked to poor health and education. Housing associations, familiar with these challenges, seem to present a worthwhile alternative. For those housing associations that are interested in pursuing commercial interests, the private rented sector (PRS) model is a potential avenue to explore.
Geeta Nandha, Chief Executive at Metropolitan Housing Association, was invited by Hugh James to speak about her experiences with this commercial venture and open up the discussion about whether this is a journey others should consider. The innovative space at Resource for London provided the perfect setting. Run by a charity, for charities, all of the proceeds of the venue’s activities directly benefit the voluntary sector, in particular to address issues of poverty in the London area.
For its part, Hugh James is keen to ensure opportunities for housing associations to learn from one another, collaborate where appropriate and help guide the conversations to meet our clients’ objectives. We hope this report helps provide focus to these discussions and contribute towards the achievement of ambitious targets.
Read the full report here.