AN AMBITION TO DELIVER HOUSING ASSOCIATIONS UNBOUNDED
FOREWORD This is not a traditional Federation document. It isn’t about what others should do to improve the operating environment for housing associations. It’s about what we can do, must do, to make the future better than the present. It’s about what we can do to help solve the housing crisis in the country. It’s about what housing associations large and small can do to build homes and communities.
NATIONAL HOUSING FEDERATION Lion Court | 25 Procter Street London | WC1V 6NY 020 7067 1010
email@example.com www.hothouse.org.uk/ambition Twitter @hothouse2033
We are not relying on others to play a part – though that would help. It is about what we can do ourselves. That is why, in 2013, we began to explore what our world could look like in 20 years’ time, by sharing ideas at lively debates and sparking discussion through challenging blogs. Emerging from these discussions is the confidence that our work over the next 20 years can make even more of a lasting and significant impact on people’s lives than it did over the previous 20 years.
We need also to banish complacency, precisely because we have such strong social purpose. Good isn’t good enough. We have an imperative to drive efficiencies through our businesses knowing that every pound saved is a pound invested in someone’s home, neighbourhood or service. And we need as individual businesses to be transparent about what our objectives are and how we’ll achieve them. We are optimistic about the future and looking forward to embracing the opportunities and challenges ahead. This vision is just the start of a conversation. Many housing associations have already signed up to achieving it. Read it with just one question in mind: Will you?
And at its heart, this vision for the future says we can change much, just by changing our minds. We are independent social enterprises – the best, longest established, social enterprises in the country. We create profit for a purpose and re-invest David Orr that for social good. We don’t need Chief Executive permission to do that. We can just do it. We have called this vision ‘An ambition to deliver – housing associations unbounded’ and envisage by 2033 housing associations owning and managing more than double the number of homes we do currently, setting our own rent, deciding who lives in our homes and selling a greater number of homes too. We believe this will transform our reach and reputation.
‘IF YOU WANT A GREAT PLACE TO LIVE, COME TO A HOUSING ASSOCIATION’
We want this to be a universally accepted truth in 2033. Not just for those most in need – although that will remain essential to our offer – but for all parts of the market, for people of all backgrounds, incomes and needs. And it won’t just be about bricks and mortar – housing associations will be at the heart of their communities, empowering our tenants and residents to create thriving resilient communities and collectively delivering a wide range of services for an increasingly diverse customer base.
By 2033, housing associations will be widely recognised as: • social enterprises: independent private bodies that exist for social good • building, maintaining and managing good quality homes across all tenures and for all income groups • investing in economically and socially healthy and resilient communities.
TOWARDS THE VISION FOR 2033 Housing associations already provide two and a half million homes for more than five million people. We invest in a vast range of neighbourhood projects that support and create strong vibrant communities. There is already enormous strength and diversity in the housing association sector, yet there remains huge potential, ambition – and an ever-growing need for us to do more.
With the next 20 years likely to be even more challenging than the last, we cannot stand still if we are to reach that potential. Over the next 20 years, our contribution will be critical in helping this country meet the challenges of demographic changes, population growth, continued austerity and the failure of successive governments to address undersupply.
‘Housing associations now have a tremendous opportunity to cast a collective strategy for the future. This will further our shared interests and enable us to make an even more powerful contribution to society over the next 20 years.’ Victor da Cunha | Chief Executive, Curo
THE CHALLENGES AHEAD The availability and affordability of housing across many parts of the country has reached crisis point and by 2033, the pressures on housing could be even more acute. • An estimated 250,000 new homes are needed in England each year to keep up with demand, but housing completions are not expect to reach 200,000 until after 2021 and there is already a backlog of undersupply.
• The number of young adults living with owner-occupier parents is expected to rise to 3.7 million by 2020. • In 2020 market rents are expected to be 39% higher than today, in 2033 they could be 100% higher. Salaries
• Rising house prices and interest rates coupled with subdued wage growth will significantly increase the number of people needing rented housing before they buy, if they ever can: • Average house prices in England will be more than 13 times the average salary in 2030, up from 11 times in 2013.
are not expected to increase by more than 40% in the next ten years.
• Government capital investment in affordable housing fell by 63% in 2010 and flat-lined in the most recent Comprehensive Spending Review. Fiscal projections mean that the environment is likely to remain challenging.
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However, the challenges are not limited to housing: • By 2030, 1 in 6 people in England will be aged 70 or over – a 54% increase from 2011 to 2030. • The baby boom of 8 million births between 2001 and 2012 will put a massive strain on an already beleaguered English housing market. • By 2033, 1 in 5 households will be single person.
• By 2020, there will be more than 315,000 multi-family households, an 11% increase from 2013. • Local authority income is expected to decrease by 15% from 2010/11 to 2019/20, cutting community services with a pressure on housing associations to fill some of the gaps. • Public expenditure on health and social care for older people may have to rise to £12.7bn in real terms by 2022, an increase of 37% from £9.3bn in 2010.
‘Certainly, tomorrow’s housing associations will have to be more resilient and adapt to a more pressured market economy. But hopefully they will hold true to their values and continue to offer what others can’t.’ Paul Hackett | Smith Institute
THE SOLUTION Housing associations are uniquely placed to be a key part of the solution. Housing associations are independent private bodies that exist for social good. We are dynamic social enterprises that generate and reinvest profit to meet our social purpose. The assets of housing associations are held in trust to deliver that social purpose. The boards of housing associations protect the reputation and ensure the long-term viability of their organisations.
Housing associations build and manage homes across all tenures and for all income groups. We have a particular focus on housing the vulnerable and those in greatest housing need, but also work to help address the challenges across all parts of the housing market. We provide supported and specialist housing and a whole range of other services to vulnerable client groups who may have been excluded by traditional services.
‘The one thing I am absolutely certain of is that organisations with real clarity of purpose AND a drive to innovate will succeed. I believe that we can and will shape our own destiny – and if we don’t, then who will?’ Boris Worrall | Executive Director Futures, Orbit Group
Housing associations have a longterm commitment to people and places. We invest in our homes, neighbourhoods, and purposeful community projects and initiatives that provide a strong sense of place, grow and sustain shared assets and ensure our communities are economically and socially healthy and resilient. The strength of the sector is in its diversity and ambition. Housing associations will be even more diverse in the future, meaning our collective offer will be broader and more ambitious in 20 years, but will be held together by a strong shared sense of social purpose.
OUR AMBITIONS FOR 2033 By 2033 housing associations could own or manage nearly six million homes, housing over 12 million people, nearly one in five in England, in good quality homes across different types and tenures, including in new towns and communities. This would more than double the number of homes we currently own and manage; adding two and a half million as new supply and acquiring over one million existing homes from other sources.
Of the estimated 250,000 new homes needed each year, trends show private developers will only build 130,000 for sale. Housing associations, who believe in a decent home for everyone, could, with additional freedoms, public investment and capacity, build the remaining 120,000 homes required.
That would mean 80,000 affordable homes and 40,000 homes for market rent or sale each year. Housing associations, with public investment, will build the majority of the 80,000 affordable homes required, providing vital homes for those in the greatest housing need.
Housing associations can develop a wide range of homes for rent and sale, providing a greater range of homes for different people at different price points in different markets wherever there is housing need. Collectively, we could build one home for market rent or sale for every two affordable homes.
Collectively we will also build far more homes for market rent and sale – by 2033 housing associations could deliver 40,000 homes a year for market rent and sale. So by 2033 nearly 10% of those housed in market-rented accommodation will be in housing association properties.
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The sector’s annual turnover could increase fivefold to to more than £70bn over the next 20 years, from £14bn in 2012. Together, housing associations can diversify, widening and strengthening the services provided including:
• partnerships with the NHS Trusts and GPs to provide outreach health care • working with local authorities to re-design local care services around the home to maximise independence and well-being for people who need care • providing specialist support services to vulnerable people with multiple or complex needs
• delivering Government programmes for supporting people without jobs into work • investing in schools, helping improve educational achievement, employment prospects and life chances • rehabilitation and resettlement of offenders, helping to reduce reoffending and ease pressures on prisons.
‘The emphasis will be on a private business that generates profits to utilise for social good – a “Profit for Purpose” business.’ Samantha Veal | Assistant Director, Development, Derwent Living
‘By 2033, Accord will be a large and dynamic group of housing, health and social care organisations spanning the voluntary and private sector with a range of commercial activities that generate profit for purpose. This is ploughed back into our core job of meeting housing, support and community need.’ Mike Hew | Chief Executive, Caldmoreaccord
ACHIEVING OUR AMBITIONS Realising this shared vision demands change. There are steps we can take, along with Government, to ensure we can significantly increase our contribution to the housing market, helping to address issues of undersupply, quality and affordability, and have an even greater impact on wider society. But there is much we can do alone.
We must grasp each opportunity, capitalise on every advantage and take control of our own futures. It is our moral obligation to be as business-like as we can, to maximise the profits to reinvest for the benefit of our tenants and customers, and for wider social good. We will:
Building on the strengths of our diversity, independence and capacity, we can break out of narrowly confined thinking determined by short-term political cycles and choose our own direction.
• continue to drive up quality and service standards, improve efficiency and value for money and drive down costs • respond to the full range of local housing need and deliver a tailored offer which promotes affordability and our social purpose and safeguards long‑term viability • stretch government investment and access a wider pool of private finance and investment opportunities
increase the sector’s total contribution to housing supply and unlock under-used capacity in new, innovative ways • maintain and regenerate the homes we own to provide good quality housing where people want to live • continue to strengthen governance and leadership • work hard on anti-poverty and employment support strategies.
There are also steps the Government can take to free up housing associations so we can realise our full potential: • give us control over our rents and who we house so we can provide the right homes at the right price for a range of tenants • make more public land available for affordable housing • release local authorities’ development capacity, by transferring housing assets into bodies who could borrow money to support the development of new affordable homes
• ensure the planning system encourages sustainable housing growth and supports the development of economically and socially strong places. And rebalance public funding in affordable housing towards capital investment as more cost-effective and better value for money for taxpayers.
BUT THE DRIVE FOR REAL CHANGE MUST COME FROM OUR OWN SECTOR...
FOR REFERENCES FOR DATA USED IN THIS REPORT, SEE THE EXTENDED VERSION AT WWW.HOTHOUSE.ORG.UK/AMBITION
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WILL YOU? VISIT WWW.HOTHOUSE.ORG.UK/WESUPPORT TO ADD YOUR SUPPORT OR TWEET @HOTHOUSE2033