The toolkit aims to boost delivery of affordable homes as the country faces a 95,000 annual shortfall despite growing demand
A new BPF toolkit aims to boost affordable homes delivery through providing greater understanding of partnership models for investors, and housing associations.
‘Affordable housing partnerships: Catalysing investment in social housing’, seeks to demystify partnership models, learning from those that have taken place, and assist the industry in evaluating effective ways to increase the delivery of much needed affordable housing.
The toolkit identifies and analyses partnership structures between affordable housing stakeholders
The toolkit identifies several challenges that should be addressed in order to speed up the creation of partnerships between housing associations and the newer for-profit social housing operators:
- More holistic market data around valuations to help partners understand whether disposals / acquisitions are appropriate.
- More standardisation of management agreements for the management of social housing by housing associations for for-profits, to speed up and simplify the process of putting these agreements in place.
- A code of governance for for-profits, along the lines of the existing code for housing associations, to build confidence in for-profit registered providers as partners.
- Support for the regulator having more resources to help bulk up their ability to work through new applications and on-going oversight more fully.
- Resolution, or at least clarification, of the different tax and grant treatment faced by housing associations and for-profits.
The toolkit underlines the fact that finding the right partner is vital to the effective delivery and management of affordable homes.
It also highlights the need for equity investors and housing associations to be aligned on strategy – including sharing the same expectations on scale, target geographies and financial expectations.
Changing economic circumstance alter the approach to boost affordable homes delivery
The launch of the toolkit follows the release of a report ‘Delivering a Step Change in Affordable Housing Supply’ from the BPF and Legal & General (L&G) last year, which found without the creation of a new funding structure, there will be a shortfall of 95,000 new affordable homes each year.
Since the report from BPF and L&G was issued in March 2022, economic conditions have significantly worsened with higher inflation, higher interest rate expectations and rent policy decisions exerting additional pressures on Housing Associations and underlining the need to find new ways of increasing the delivery of more affordable homes.
Partnerships with equity investors essential to meeting housing need
Rob Beiley, chairman of the British Property Federation’s Affordable Housing Committee and partner, Trowers & Hamlins, said: “We have launched this toolkit as a practical guide to facilitate effective and long-term partnerships between investors and housing associations.
“We know that against a backdrop of inflationary pressures and increased investment in existing stock, Housing Associations are having to pare back their development programmes. New partnerships with institutional investors offer Housing Associations new ways to maintain or enhance their delivery of much needed affordable homes and meet their wider social objectives.
“Partnerships are not just about the exchange of funds, however, but the exchange of knowledge, skills, and ways of working can also be very beneficial.”
Ian Fletcher, director of policy at The British Property Federation, commented, “The BPF’s toolkit sets out the different roles, responsibilities, and risk-sharing and aims to provide clarity on the routes that equity investors and housing associations can take to increase the supply of affordable homes in order to meet long-term societal needs.
“The key to an effective partnership is ensuring agreement on the scale of the shared ambition, location of new homes, financial expectations, and an appropriate sharing of risk.”
