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Large association has 400 unsold homes amid ‘massive market slowdown’
Housing associations have warned of a “massive slowdown” in the London sales market, as it emerged that one large organisation currently has more than 400 unsold units on its books.
Notting Hill Genesis (NHG) has 87 private sale and 319 shared ownership homes that are currently empty. Some of these homes have been the subject of offers and the association is hoping to convert others to rental units.
The London market is currently being hit by cautious buyers delaying purchases in the build-up to Brexit, over fears that a no-deal exit from the EU would trigger an economic crash.
An NHG spokesperson said: “The lack of clarity around Brexit is having a profound effect on the sales market, with people unsure about whether to buy at this stage, questioning what will happen to house prices and whether interest rates will rise.”
Giant London association L&Q warned last month that a “downturn in the property market” would see it halve its anticipated surplus this year.
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Geeta Nanda, chief executive of Metropolitan Thames Valley, told Inside Housing: “In London, if you look at resales, shared ownership, staircasing, new build shared ownership, we’re seeing generally a slowdown.
“Market sale is that much worse. It’s an incredibly quiet market at the moment and again, people are not committing. We’re seeing a massive slowdown in terms of market sale.”
One finance director, who preferred not to be named, added: “The tide’s receding and people are being left visible.”
An NHG spokesperson said that “the majority” of the 87 market sale homes are under offer and NHG is “interested in pursuing any avenue for converting [the 319] into rented homes”.
The spokesperson added: “Our first-tranche [shared ownership] and private sales for this year are below target, but that is consistent with what the housing sector is experiencing as a result of challenging economic and political conditions. We are keen to explore all possibilities for how we could make these homes available for affordable housing.”
The downturn is mainly being felt in the London market, although associations have also reported difficulty selling homes in parts of the South East.
However, Jon Lord, chair of Greater Manchester Housing Providers and chief executive of Bolton at Home, told Inside Housing this was not an issue in the North, adding: “Obviously, the big variable on all this is Brexit. But we’re not seeing anything like what’s in the South East and London.”
Steve Douglas, chief executive of consultancy Altair, said: “Government needs to recognise that the new model for housing associations, which was significant amounts of cross-subsidy, doesn’t work in a market downturn.
“If government wants to continue to sustain a building programme, it needs to now support housing associations in a counter-cyclical manner.”
The NHG figures were revealed to Inside Housing after chief executive Kate Davies cited them in a meeting with Emma Dent Coad, Labour MP for Kensington.
Ms Dent Coad said the empty homes “demonstrate the risk involved for housing associations who decide to act as property developers”.
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