Independent regulator needed to support house building
An independent housing regulator is essential if the construction of affordable homes is to continue following imminent cuts in development grants, housing professionals were told.
Piers Williamson, chief executive of The Housing Finance Corporation, told the Chartered Institute of Housing's annual conference that an independent regulator would reassure private lenders and allow housing associations to borrow at more favourable terms.
Associations must continue to “sweat their assets” as public expenditure tightens, he said during a session on house building. “We can't afford for anyone to sit back and enjoy the ride,” he told delegates in Harrogate on June 22.
Mr Williamson stressed that housing organisations will find innovative solutions to the squeeze on public spending providing there is certainty over the economic outlook. “We are over the first stage in terms of the Budget but even if there is a really tough deal, it's better to know about it and move on,” he said.
Nic Bealey, group director of strategy, marketing and sales at L&Q, said some associations must manage their assets more effectively so that the sector as a whole raised more funds. “There are some housing associations that don't develop but are sitting on assets,” he said.
Associations should accept that grant rates were bound to fall, but there were other ways to fund house building, including higher rents, while traditional ways of cross-subsidising development through surpluses were still an option. “I don't believe that cross subsidy is dead,” he said. “It's hibernating.”
In a report from CIH’s UK Housing Panel published on 18 June, one group chief executive of a housing association said: “Any change to the new regulatory system must avoid a major impact on the attitude to lenders to the sector with a knock-on effect on credit ratings and the cost of borrowing.”