'We need to be ambitious in our development plans in the North'
Supported housing, supply and certainty on rents – Home Group chief executive Mark Henderson outlines the biggest issues facing housing organisations in the North East and explores potential solutions.
Extending Local Housing Allowance rates to supported housing
Local Housing Allowance (LHA) rates vary across the country, whereas the cost of providing supported housing doesn’t. This means that in lower market value areas, the LHA rate alone won’t cover the rent and service charge costs, putting these services at risk. Using an example of two Home Group services, both providing similar support, our service in Basingstoke has no shortfall, whereas our service in Durham has a weekly shortfall of £89. What we need from the government is a new Supported Housing Benefit, with sheltered housing to be separately funded. This new benefit must recognise the regional differences in LHA rates so that no region is left behind and we can continue to provide high quality supported housing services throughout the country.
When the current formula for setting rents ends in 2019, we don’t know how rents, our key source of revenue, will be determined. Without a decision, we cannot accurately make plans to invest in building new homes. It could also mean our lenders will be more cautious as a result. We need to have a constructive dialogue between the government and the sector around what the future rent setting model might look like. Ideally, a long-term fix that meets government concerns and enables sustainable development is the answer. We’ve all seen short-term fixes that don’t quite solve the problem and it’s important we get this right. However, this could take time to develop. In order to give certainty now, an interim deal for three years would be a good solution in order to get more homes built.
We all know we need to build more homes throughout the country. In the North alone, Homes for the North research shows that 500,000 new homes are needed over the next ten years. This is essential both to keep pace with demand, but also to support an ambitious economic future in the region. In order to increase development sufficiently in the North, the government should recognise that a different policy approach will be necessary. What is the answer in the south, won’t necessarily be the case in our region. We should work with them to help identify the necessary policy variations.
Alongside these key policy changes, the housing sector needs to be ambitious in our development plans in the North. We need to work together, and with other key partners, in order to build the high-quality homes needed in our region.
- Mark is speaking at CIH’s North East Conference 2017, which takes place on 16-17 November in Newcastle.