SOCIALhousing
The social mix A
ccording to the latest official figures, in June this year the number of housing starts for housing associations fell by a third, with council starts flatlining
at what were already very low levels. Yet the need for affordable housing hasn’t gone away; in fact, as more and more tenants are priced out of the private rental market (not to mention all the first time buyers who can’t arrange finance and so are having to rent instead), the need is more pressing than ever. That has led to an increased need for –
and a reliance on the private sector to get involved. David Ireland, chief executive of the Empty Homes Agency, says that the private sector has been active in social housing for quite a while. “There was a big push in the early part
of the last decade with the government encouraging councils to get residents out of B&B accommodation and into self contained lets, via private sector leasing.” That was one thing, now, he believes, the main driver behind what is happening now is quite simple; grants for new building in the public sector have been drastically cut. “Councils have not been able to provide
all the social housing that they needed to, so there have been various strategies to address this.” At the same time, there has been a shift
from social rent to the idea of affordable market rent – which has led to landlords setting rents 20 per cent below open market levels. John Taylor, CEO of property manager
Orchard & Shipman, believes this could attract new private sector investment, since it coincides with institutions starting to become interested in residential property as an asset class. “The problem with residential investment has always been one of scale,” he explains; institutions want to be able to invest several million pounds a time, not buy one £150,000 property after another. “Social housing gives you a chance to assemble a volume portfolio quite quickly, so it’s attractive to major private sector investors.”
12 OCTOBER 2011 PROPERTYdrum
Orchard & Shipman and Pinnacle PSG are leaders in housing management services.
THE SOCIAL/PRIVATE PIONEERS Despite this, relatively few private sector organisations have, so far, got involved in public sector housing. John Taylor says, “Savills and Knight Frank have their affordable consultancies. In terms of operators there’s not a huge number of people in the market – there are some lettings agencies, but not many. In lettings, they’re usually small, local agencies which have developed a relationship with local councils.” Major companies include Orchard &
Shipman together with Pinnacle PSG, which provides housing, estate and facilities management. Pinnacle manages over 20,000 social
housing units, and has full TSA accreditation (the Tenant Service Authority regulates housing managers which are not Registered Social Landlords). Pinnacle demonstrates the fact that
addressing the social housing space requires companies to adopt a number of different strategies. In addition to its management services division, it has established Regenter, a joint venture with
Andrea Kirkby looks at how the social/private housing mix works.
John Laing, to bid for Public-Private Partnerships in housing; it also operates a specialist service for managing mixed tenure developments, which appear to be one way forward in terms of funding affordable housing. These companies generally take over
management of existing housing association or council stock. However, there is a major stock shortage in many areas, particularly in London, where councils need to be able to access temporary housing. That has created an opportunity for
lettings agents to link up private landlords with local authorities for long term leasing schemes. One interesting example is Pathmeads,
part of housing association Genesis Housing Group, manages over 20,000 homes in London, working with local authorities, housing associations and private sector landlords. Pathmeands has also crossed the tracks to operate a private lettings service – a rare instance of a public sector organisation moving into the private sector. Notting Hill Housing has also moved
into the private sector, offering a wide range of services that includes private lettings and intermediate rent, as well as social housing. In addition to managing its own estate, it works with private sector landlords, from
DAVID IRELAND CHIEF EXECUTIVE, THE EMPTY HOMES AGENCY
Councils have not been able to provide all the social housing they needed to, so their have been various strategies to address this.”
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