Housing associations could more than double new homes output

28 November 2016

Housing associations across England have the financial capacity to more than double the number of new homes they bring forward, delivering up to a total of 84,000 a year by 2029, according to property adviser, Savills.

In a new report, Releasing untapped potential for more housing, the firm identifies the potential for housing associations to deliver 44,000 extra homes a year in just over a decade, through additional borrowing against existing assets and a greater partnership approach across the sector.  The increased output would equate to more than a quarter of the total 300,000 new homes needed annually to tackle years of undersupply.

But, the report states, some form of subsidy is critical to deliver these homes across a range of tenures including affordable housing. In the absence of additional grant funding, housing associations would need to secure land at zero or low value in order to be able to build shared ownership homes or affordable rented housing.

Last week’s autumn statement made housing a top priority and provides greater support for new homes through the £23 billion National Productivity Investment Fund, which includes £1.4 billion grant funding to enable 40,000 new affordable rented homes by 2021.

“There is clearly a desire by Government to boost housebuilding in areas of greatest need and to support new housing across a range of tenures,” says Chris Buckle, associate director Savills residential research. “Our work shows that there is huge untapped potential for HAs to do even more and fill the gaps left by the private sector.”

Earlier work by Savills researchers assessed that the sector could access £7.4 billion of additional borrowing against existing assets. This new paper models how many new homes this could finance in addition to current housing association activity (click to see table).

“The message from the autumn statement is a great start, but with bolder ambition we can really increase the number of homes being built, spread across a range of tenures,” says Robert Grundy, head of housing at Savills. “Housing associations are uniquely well placed both to boost delivery and to manage portfolios of rented and shared ownership homes.

“Increasing delivery rates is a long game and it will take a number of years for the sector to transition into the development space as many become more accustomed to operating with greater risk and market exposure.” 

 
 

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