News that the biggest 15 social landlords in London are to venture into the private property market comes as no surprise.
The move will see 13,000 affordable homes built in the capital by 2015, with 4,000 additional properties available to rent, with the profits ploughed back into further – and much needed - affordable housing.
The National House-Building Council has seen first-hand the gradual decline in the number of affordable homes being built. Our figures also show this decline is not abating; 2012 brought the lowest number of new affordable home registrations since at least 2008.
Despite welcome news with the planned increase in London, a combination of factors means the future is not likely to be easy. Sustainability targets are not going away, budgets for affordable housing are being squeezed and housing benefit is being reformed.
Further, the National Affordable Housing Programme aims to increase the supply of homes; this cumulative pressure is likely to have an impact on the industry, creating a risky environment for affordable housing providers and the wider industry.
With the slow take off of the government’s affordable housing programme (charged with delivering 117,000 new homes by 2015), there will be increasing pressure on developers and contractors to build more homes, more quickly and, crucially, at a lesser cost.
But ramping up production levels in a time of austerity risks compromising the quality of homes being built. It is imperative that budget cuts do not spark corner-cutting or a reduction in training budgets.
With these new homes and new properties in general, it is vital that quality is maintained. The whole housing industry and supply chain needs to work together, in collaboration with the government and bodies like NHBC, to design out the kinds of risks that may emerge from ramping up production.
New and cheaper modes of construction, as well as new products and technologies, are being developed all the time, but it is essential these are used appropriately and after adequate testing. Continued research will be important, as will sharing learning and best practice within the industry.
Looking ahead, I feel that we will see more housing associations move into the private market as the sector builds momentum. The news of the biggest social landlords in London venturing into the private market shows a widening of their scope in an effort to provide more homes for those currently struggling with sky high rent – something I’m sure we will see more of.
Mehban Chodery is head of social housing at the National House-Building Council.