6 key themes from CIH Housing

1. WORRIES ABOUT WELFARE CUTS

The sector is fearful of the government’s future welfare reform measures to an extent it was not back in 2010 after the last election – and with good reason. The Conservative government has pledged to find £12bn of welfare savings.

So where will they look? The government is unlikely to hit benefit for older people, including pensions, which in 2015/16 was forecast to account for £116.7bn of the government’s total £210.8bn welfare bill. When viewed in this context, the ever-increasing housing benefit bill (forecast to be £24.5bn in 2015/16) looks the best candidate for cuts.

CIH Housing delegates were convinced housing benefit will be targeted further – with limits on the percentage of households’ rent covered by the taxpayer being the best bet. This would of course be catastrophic for social landlords’ rental streams, as two-thirds of the 4.9 million housing benefit claimants in Britain are in social housing.

‘There will be nothing left of the welfare safety net in five years,’ was the perhaps slightly hyperbolic verdict from one well-known housing association chief executive.

2. ASPIRATION AND THE RIGHT TO BUY

Brandon Lewis became the fourth housing minister in six years to address the conference and (whisper it quietly) went down better than most – despite delivering arguably the most unpopular message.

Mr Lewis simply told the conference that the government’s goal is to ‘help people buy their own home’ as opposed to improving or building homes for sub-market rent. He challenged the sector to ‘champion aspiration’ by backing the Right to Buy extension – implying that the government is at best doubtful about the sector’s support ‘for aspiration’, although he ducked a direct question about whether he thinks the sector is anti-aspiration.

After his keynote address, delegates were furiously debating whether the sector supports ‘aspiration’ in other ways, with many pointing out the work they do to get people into work and improve lives.

3. CHEAP CASH

Despite the dour outlook from some, finance teams were feeling pretty positive at this year’s conference.

In many ways, this isn’t surprising. This year has been terrific for associations in terms of their ability to raise long-term debt on the capital markets. Investors are piling into housing association bonds – especially those issued with government guarantees – a trend which some feel has, at least temporarily, ended the debate about where the long-term financing for new homes will come from, despite growing appetite from investors for equity deals.

As Andrew Smith, executive director at Mill Group, said: ‘The appetite from social housing providers is only in one area [bonds]. That’s a disconnect [with equity investors] that looks pretty intractable in the current environment.’

There is some concern that welfare reforms and the Right to Buy might upset the apple cart, but the general mood is investors are keen enough to not be overly perturbed.

4. DEVO DREAMS

Another key theme dominating minds and conversations at the conference is the devolution agenda.

The conference, of course, took place in Manchester, which is on the cusp of launching its £300m fund of recoverable investment to unlock housing development in the city, as it moves towards devolution to a city mayor.

Housing association bosses from other parts of the country are optimistic about the progress devolution might bring, particularly in addressing their long-standing concerns about London-focused policy-making.

Northern landlords think a switch to local decision-making will rebalance the agenda in terms of much-needed regeneration as well as supply.

5. DEVELOPMENT AMBITION

Development teams were taking a well-earned break at the conference after successfully seeing off a staggering year for the sector in terms of new homes completions.

But there was a sense of optimism going forward too. Linked to the cheap finance point, teams at even medium-sized and small organisations are drawing up plans for big development pipelines, despite the low levels of government funding available.

The trend appears to be moving away from the peaks and troughs of government funding and into drawing up more consistent pipelines which the housing association largely takes responsibility for funding.

Delegates warned, however, that the reduced grant funding means landlords are more exposed to the market – meaning they may find it more difficult to develop when the economy next has a downturn.

6. GETTING THE MESSAGE OUT THERE

One of the biggest themes of the conference was the need for the sector to get its messages through to government and the wider public.

Many delegates were not convinced the sector’s Homes for Britain campaign succeeded in effectively getting the message across about the housing crisis, while others re-iterated swathes of the public remain unclear what social landlords are for.

Inside Housing’s myth busting session at the conference – which sought to tackle lazy and unfounded assumptions made about social landlords and tenants – was well received.