As a new dawn emerges for the vision of UK housing, recent reports and policy announcements are welcomed news for all working in the industry. Housing Industry Leaders explores what this means for housebuilders and tenants in the UK.
In this issue, Housing Industry Leaders analyses how one-in-four councils are unable to enforce legal standards in private-rented homes, what the good landlord charter could bring to Manchester, and the need to safeguard heritage in the face of decarbonisation.
Floyd March Editor
Paul Rose Graphic Designer
Hannah Wintle Multi Media Journalist
“ AN IMPORTANT STEP ON THE UK’S PATH TO NET ZERO
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INDUSTRY REACTS TO THE AUTUMN BUDGET 2024
Following their historic landslide victory in July’s general election, Chancellor of the Exchequer Rachel Reeves delivered the first Labour Budget in 14 years at the end of October, and made several announcements on how the government will approach housing.
After a campaign that leaned heavily on the promise of change, the sector waited to hear how this new government would facilitate and accelerate progress.
In the days and weeks following the Budget, Housing Industry Leaders heard from representatives from across the housing sector as they shared their reactions, thoughts, and opinions on whether the new government has gone too far, or indeed far enough.
The government will invest more than £5bn to deliver their housing plan.
WHAT WAS IN THE BUDGET?
The government will give £1bn to accelerate the removal of dangerous cladding on homes, following the Grenfell Tower report.
This Budget will increase the Affordable Homes Programme (AHP) to £3.1bn, provide £3bn worth of support and guarantees to increase the supply of homes and support small housebuilders.
Investment has been promised to renovate sites across the country – including at Liverpool Central Docks – to deliver 2000 new homes.
The government will reduce Right to Buy Discounts. Local authorities, meanwhile, will retain receipts from the sale of any social housing so that it can be reinvested into their existing stock and new supply.
The government will kick-start the Warm Homes Plan through an initial £3.4bn over the next three years to transform 350,000 homes, including a quarter of a million local incomes and social homes.
MANY ANTICIPATE A BRIGHT FUTURE FOR SOCIAL HOUSING
With the announcement of increased funding into the AHP, many in the social housing sector praised the government’s focus on social housing. Allison Whittington, Head of Housing and Health at Zurich Municipal, summarised why this sector is so deserving of the Budget’s attention: “Increasing the supply of housing for those that need it most is welcome. In addition, it is important to improve the security of housing in our society.
“We also have to ensure that the quality of homes we build will be ones we are proud of in generations to come. Housing Associations make a significant contribution to the delivery of our new housing supply and have seen their finances stretched over recent years. Support for this vital
sector is needed to enable them to continue to play their part in creating homes for all.”
These sentiments were echoed by several housing association representatives, including Paul Dolan, Group Chief Executive of Riverside. He said: “We welcome the Chancellor’s focus on affordable housing and taking the first steps towards achieving the government’s mission of building 1.5m new homes in today’s budget.
We welcome the Chancellor’s focus on affordable housing and taking the first steps towards achieving the government’s mission.
“The £500m boost to the AHP will help with delivery in the short-term but the acid test will come in next year’s Spending Review when longterm funding for the AHP will be decided.”
Rosemary Du Rose, Chief Executive at Beyond Housing, added: “The government’s announcement in today’s budget to consult on a five-year social housing rent settlement, allowing rent increases in line with inflation plus 1%, is encouraging. This provides the stability needed for renters, and also allows for investment in new and existing homes, our workforce, and essential services.”
“Additionally, the adjustment in right to buy discounts helps retain more affordable homes, aligning with both long-term housing needs and offering pathways to homeownership.”
IS SUPPORT FOR SOCIAL HOUSING A HIGH ENOUGH PRIORITY?
Though many praised the additional funding to the AHP, some wondered whether it would be adequate to facilitate lasting change. Dr Henrietta Blackmore, National Director of Habitat for Humanity Great Britain, agreed that the government’s top housing priority should be stimulating investment in social homes through long-term funding certainty for councils and housing associations.
However, she added that the Government should go further: “Many of the homes produced with this [AHP] funding will remain out of reach of those most in need, and meanwhile hundreds of thousands of people remain stuck in often inappropriate temporary accommodation.”
Charlotte Cook, a partner at social housing lawyers Winckworth Sherwood, highlighted another roadblock, after stating that the long-overdue wave of social housing development is crucial in the face of the current temporary accommodation crisis facing councils.
She explained: “Local authorities have lost much of the expertise they once had when they built, owned and managed large property portfolios. That will need to be rediscovered and re-energised. Many local authorities do have development companies, and it would be sensible for the government to allow those to access any future funds.
“Many local authorities are already actively buying back good quality homes that were sold under the right to buy. If this funding is used to accelerate this, there is the risk that local authorities may find themselves under fire for rewarding tenants twice – first under the right to buy discount and then buying homes back at much higher market value.
“Right to buy has been enormously successful, enabling thousands of people to purchase their council home. But it has decimated local authority housing stock due to the restrictions on use of right to buy receipts to build new homes. Allowing local authorities to retain receipts is vital and welcomed.”
WILL THE BUDGET DELIVER SUSTAINABLE CHANGE?
Where net zero is concerned, the housing sector embraced the announcement of the Warm Homes plan, which was initially promised in Labour’s manifesto. Tom Armstrong, Managing Director of Project Solar, the UK’s biggest solar panel installer, commented: “Kickstarting the Warm Homes plan to help social housing providers deliver energy upgrades is an important step on the UK’s path to net zero.”
Kickstarting the Warm Homes plan to help social housing providers deliver energy upgrades is an important step on the UK’s path to net zero.
However, as Tom highlighted, the sustainability issue around Labour’s pledge to build went unaddressed: “The provision of £5bn to build 1.5 million homes during this Parliament will at least be welcome news to some, but the Budget fell short of outlining how these homes are going to be built sustainably.
“Our most recent market research revealed that 70% of the UK public believe solar panels should be mandatory on new build properties. Now is the time to make that happen. We urge the Government to work closely with house builders and renewables businesses to ensure that all future homes are built with cleaner, cheaper energy in mind from the outset.”
Steff Wright, Chairman of Gusto Group, agreed that sustainability should be embedded into future housebuilding practices: “The one point I would make in relation to the investment in housing next year is that, if £5bn of the taxpayers money is going to be invested in delivering new homes, then let’s kick start the growth of a new housebuilding industry led by the use of natural building materials and built by local SME construction firms.
“That way we will reduce the emissions from concrete and steel, whilst locking up carbon in the structure of our new homes. Alongside this we will be upskilling local trades people in the communities the new homes are being built in.
“The government has an excellent opportunity to drive innovation in the construction and manufacturing industries by setting high standards of design, energy performance and carbon emissions for all new homes that benefit from government funding.”
SOME ARGUED THE BUDGET WON’T BE ENOUGH TO UPLIFT THE SECTOR
As the ripples of the Budget are felt throughout and beyond the housing sector, some expressed concerns that it could do more harm than good. Peter Stimson, Head of Product at MPowered Mortgages, commented: “Fewer than one in 10 mortgage applications made this year were for a buy-to-let loan, less than half of what it was just a few years ago.
“The changes come into force from [31 October], so there’s a real danger that thousands of purchases that were already in the pipeline will now be abandoned.
“With rents already rising and the supply of rental properties about to be further disrupted, rents could now climb even higher. Far from solving the housing crisis, this at least in the short term, could well exacerbate it.”
Finally, John Hutton, the former cabinet minister who now chairs the Association of Infrastructure Investors in Public Private Partnerships, welcomed the Chancellor’s commitment to public investment in new infrastructure.
“However, it will be impossible to get the scale of investment needed to get Britain building again without private financing,” he added.
“The UK is one of the only countries in the developed world that doesn’t use public private partnerships to build new schools, hospitals and transport.
“We need a modern partnership between the private and public sectors that addresses the issues of the past if we’re to avoid another lost decade of British infrastructure.”
WARM HOMES PLAN: UP TO 300,000 HOMES COULD SEE ENERGY MEASURES
Warm Homes Plan will help people find ways to save money on energy bills and deliver warmer, cleaner to heat homes, with up to 300,000 homes to benefit from upgrades next year.
Offer includes grants for heat pumps, support for renters and lowincome households, and new investment in British manufacturing.
Up to 300,000 households will benefit from home upgrades in the next year, as the government announces new steps to help households of every kind take up measures that can help save money on their bills and deliver cleaner heating.
This includes boosting the budget for the Boiler Upgrade Scheme to support more households switch to a heat pump – which can save families around £100 a year compared to a gas boiler by using a smart tariff effectively, and insulating more homes across the country – potentially saving homeowners around £200 per year.
The wide-ranging package is another important step in delivering the Warm Homes Plan and reaches across all households, supporting:
Government will also deliver planning reform by removing the one-meter rule that required planning permission to get a heat pump in England.
f Homeowners in England and Wales to get a £7,500 heat pump grant through the Boiler Upgrade Scheme, which had the highest number of applications ever in October according to Ofgem.
f Households install an air source heat pump without needing to submit a planning application in England – removing the 1m rule, with figures from Octopus showing 34% of those who order a heat pump are discouraged or drop out for reasons attributed to planning permission.
f Social housing residents, lower income householders and renters to receive funded energy efficiency upgrades - including insulation and low-carbon heating - through the Warm Homes: Social Housing Fund and Warm Homes: Local Grant respectively.
WARM HOMES PLAN WILL ENSURE MILLIONS MORE
HOUSEHOLDS BENEFIT FROM HOMEGROWN ENERGY
Working alongside the government’s mission to make Britain a clean energy superpower, the Warm Homes Plan will ensure millions more households benefit from homegrown energy delivered by every new turbine, solar panel or pylon built on the path to energy independence.
Minister for Energy Consumers
Miatta Fahnbulleh said:
“The idea at the heart of our Warm Homes Plan is a simple one – all families deserve the security of a home they can afford to heat.
“But for too long, that has been out of reach for far too many people who have been left with draughty homes and sky-high bills. That is why we are taking immediate action today to make cleaner heating available to more households.
“This follows our plan to lift over one million households out of fuel poverty by consulting on boosting minimum energy efficiency standards for all renters by 2030, delivering warmer homes and cheaper bills.”
Households have paid the price in recent years of the energy bill crisis, following Putin’s illegal invasion of Ukraine, which exposed years of overreliance on international gas markets. The government is now overturning this legacy by investing in homegrown, cleaner energy free from the control of dictators.
THESE STEPS HELP:
SUPPORT THOUSANDS MORE HOUSEHOLDS WITH HOME UPGRADES
f Helping thousands more families to get £7,500 off the cost of a heat pump, with an extra £30 million for the Boiler Upgrade Scheme this financial year, while almost doubling the budget to £295 million for the next financial year.
f Overseeing around £3.2 billion of investment in warmer homes across 2025/26 from government, social housing providers and supplier obligations, delivering measures to help lower bills and support cleaner heating to up to 300,000 households.
DELIVER NEW REGULATIONS TO BACK CONSUMERS AND ENCOURAGE INNOVATION
f Lifting over one million households out of fuel poverty under plans to consult on increasing minimum energy efficiency standards for all rented homes by 2030.
f Consulting on plans to increase energy efficiency standards for new boilers and heat pumps, saving households with a new gas boiler £30 a year on running costs.
f Allowing more households in England to install an air source heat pump without the need to submit a planning application from early next year, by removing the rule requiring them to be installed at least one metre from a property’s boundary. This will provide greater flexibility, with rules still in place around listed buildings.
BACK BRITISH MANUFACTURERS
f Introducing a reformed Clean Heat Market Mechanism on 1 April 2025, with new changes to make sure manufacturers have the time they need to scale up supply chains, making heat pumps an even more attractive choice for households and boosting sales without penalising those buying a new gas boiler. There will also be government support available for each and every heat pump installation that is required under the mechanism in 2025-26.
f Supporting industry by investing over £5 million in Ideal Heating as the very-first award from the Heat Pump Investment Accelerator competition, kickstarting a homegrown heat pump industry to boost the UK’s energy security and support hundreds of low-carbon jobs.
f Working with trade unions to ensure good jobs throughout the supply chain, backing Britain’s world class traders.
This follows a landmark announcement from the National Wealth Fund, whose financial guarantees enabled up to £1 billion of funding from Barclays UK Corporate Bank and Lloyds Banking Group to help housing associations provide warmer, more energy efficient homes to tenants across the country.
By charting a bold new approach to delivering warmer homes and taking immediate action to speed up the rollout of cleaner heating, the government will cut energy bills, tackle fuel poverty and create new opportunities for jobs and skills right across the country.
STAKEHOLDER REACTION:
Mike Foster, Chief Executive, Energy and Utilities Alliance, said: Minister Fahnbulleh has constructively engaged with industry and British manufacturers, who have warmly welcomed this new approach. By working in partnership, we have an outcome which no longer unfairly penalises business and consumers. That is a big win for households across the country.
Chris O’Shea, CEO, Centrica, said: We are delighted that the Government is making it easier for households to install heat pumps by removing the outdated 1m planning rule in England and increasing the funding available in the Boiler Upgrade Scheme. Heat Pumps will play an integral role in decarbonising home heating, and we look forward to supporting customers transitioning from gas boilers to heat pumps, through our Hive Heat Pump offer which can save customers up to £456 on their energy bills.
Greg Jackson, CEO, Octopus Energy, said: More than a third of customers who order a heat pump drop out because of planning issues, leaving them stuck with dirty, inefficient gas boilers. Removing outdated and unnecessary red tape is an urgent priority to grow this sector and get low cost, safe, clean heating technology into British homes.
Dhara Vyas, CEO, Energy UK, said: It is welcome to see the Government increase funding for the Boiler Upgrade Scheme (BUS), set out more detail on the Clean Heat Market Mechanism (CHMM), and remove planning barriers to heat pump installations. This is a clear recommitment to heat decarbonisation, which will play a vital role in improving energy security and reducing our reliance on gas. The BUS is enabling consumers to install heat pumps at record rates, with demand for low carbon technologies increasing.
It is right that the Government does not further delay delivery of the CHMM, as this mechanism is vital to increasing availability of heat pumps and attracting investment into UK manufacturing. The industry stands ready to work with government to ensure the CHMM is effective and ambitious, enabling customers to choose when they make the transition, while also developing robust low carbon heat supply chains and markets in the UK.
It is right that the Government does not further delay delivery of the CHMM, as this mechanism is vital to increasing availability of heat pumps and attracting investment into UK manufacturing.
HOW CAN THE GOVERNMENT SAFEGUARD THE FUTURE OF SOCIAL HOUSING?
As we look ahead to the new year and the progress to be achieved in 2025, Housing Industry Leaders is reflecting on some of the biggest reports and most influential findings of 2024.
One report stands out for the sheer amount of local authorities that backed it. Commissioned by Southwark Council, but supported by over 100 councils throughout England, Securing the Future of Council Housing sought to identify the routes to revitalise the social housing sector despite the economic climate it has endured.
As he identified the life-changing potential that good social housing brings to families throughout the nation, Cllr Kieron Williams, Leader of Southwark Council emphasised the financial challenges to overcome.
He wrote: “Lifting the quality of our existing council homes up to modern, safe, healthy and green standards is a huge task. As is delivering the new council homes our communities urgently need. The perilous state of our national council housing finances must be addressed if we are to succeed.”
The report, therefore, outlined strategies to accelerate improvement and progress, and created five solutions for the new government to introduce at the next Spending Review in Spring 2025, so that council housing can continue to transform lives for generations to come.
1. ESTABLISH A NEW, FAIR, AND SUSTAINABLE HOUSING REVENUE ACCOUNT MODEL
The report draws attention to the current state of the Housing Revenue Account (HRA) system, and highlights how many councils are struggling to maintain existing homes, meet improvement demands, or build new housing.
Since its introduction in 2012, thanks to frequent and unpredictable financial changes such as interest rate adjustments, the system has become destabilised and its long-term sustainability has been undermined.
The government’s pledge to stabilise rental income, the report asserts, is positive but insufficient. As such, a principles-based financial framework is needed to ensure the HRA system can sustainably meet social housing needs and provide confidence to councils, lenders, and tenants.
The establishment of a new HRA model should therefore include a long-term and certain rentsettlement, an adjustment of HRA debts, and more favourable conditions for council investment.
2. REFORM UNSUSTAINABLE RIGHT TO BUY POLICIES
While it has certainly proved a popular policy, the report argues that the current Right to Buy framework is unsustainable for the HRA system, central government finances, and local housing markets.
Of nearly two million social homes sold under Right to Buy, only 4% have been replaced, and 43% of households in the private rented sector receiving housing benefits now live in former social homes that have been lost to the market through the scheme.
This has significantly reduced the availability of affordable housing for those that need it most, as well as placing an additional financial strain on public resources.
To address these issues, the report calls for reforms to Right to Buy so as to balance homeownership targets with the sustainability of social housing and HRA revenues.
The government’s proposed changes, including adjusting discounts, and enabling local authorities to retain Right to Buy receipts, were welcomed by the report and later announced in the Autumn Budget.
Alongside the reduction of discounts, the report also calls for the protection of newly built council homes from sale.
3. REMOVE RED TAPE ON THE AFFORDABLE HOMES PROGRAMME AND OTHER FUNDS
With funding for social housing often complicated and time-consuming for local authorities to bid for and access, the report highlights that councils are often left with limited resources while the government underspends, such as Homes England using only 77% of its 2022–2023 budget.
The report therefore emphasises that this approach to funding actually hinders effective housing development due to wasted time and resources, as well as disproportionately allocating funding to the councils that have the resources to prepare multiple effective bids, while councils with limited resources often lose out.
To improve this system, the report calls for fewer but larger, more flexible grants allocated over longer periods, allowing councils to combine funding sources and focus on overall development outcomes as opposed to ‘inflexible criteria’ that can lead to underspending.
Removing the red tape on funding including the Affordable Homes Programme should also include extending the strategic partnership model to councils. Funding should be streamlined, allocated simply, reflect recent cost inflation, and allowed to be used flexibly to meet local housing need.
4. ANNOUNCE A GREEN & DECENT HOMES PROGRAMME
With much of England’s social housing stock requiring significant investment to meet safety and decency standards, the financial pressures are significant. The Decent Homes Programme, introduced in 2000, sought to address these by improving standards through £37bn in funding.
Due to budget cuts from 2010 onwards however, progress has slowed, and many houses have fallen into disrepair.
Furthermore, new safety standards have been triggered by tragedies such as the Grenfell Tower fire and the mould-related death of Awaab Ishak, and these are set to further strain finances.
To address these challenges, the report calls for the restoration of the HRA system, which, it argues, could enable councils to better maintain and improve housing stock by providing more stable funding.
It also suggests adjusting the 2012 self-financing agreement to allow councils to undertake necessary upgrades and drive efficiencies through maintenance programs. This would simultaneously help reduce costs while improving the overall quality of housing and meeting new safety standards.
The report states that a long-term, capital funded programme will be vital in bringing all council housing up to the new standard of safety, decency and energy efficiency by 2030 – and a road map for achieving net zero by 2050.
5. FUND THE COMPLETION OF NEW COUNCIL HOMES
Finally, the report acknowledges that for over forty years, local authorities have contributed little to new housing in England, despite their successes in the 1960s. It states that multiple independent reviews highlight the need for local authorities to contribute to housebuilding targets in order to tackle the housing crisis.
While some councils have restarted housebuilding since the HRA borrowing cap was lifted in 2018, the report said that still more needs to be done. However, rising construction costs and restrictive funding rules also hinder housebuilding, as social housing production continues to lag behind Right to Buy sales.
While some councils have restarted housebuilding since the HRA borrowing cap was lifted in 2018, the report said that still more needs to be done.
The report highlights that government intervention, including converting unsold market homes into social housing, has been effective in the past, and advocates for more flexible funding and lessons from previous programs, like Kickstart, to sustain housing supply and innovation.
It calls on the government to limit the short-term loss of housing supply and construction sector capacity caused by the unfolding market downturn, by funding councils to rescue and complete stalled development projects.
The report ultimately describes the current landscape as a ‘fork in the road for council housing in England’, and asks of the government and councils throughout the country to collaborate on a new HRA model reflective of today’s priority.
As the report concludes: “There is still time to secure the future of council housing in England for current and future generations – but the time to act is now. To delay would be to tolerate further decline in the quality and quantity of council homes which the country can ill afford.”
UNLOCKING THREE DECADES OF ECONOMIC BENEFITS
THROUGH FIVE YEARS OF SOCIAL HOUSEBUILDING
The latter months of 2024 have seen a growing focus and intrigue around Labour’s pledge to build 1.5 million homes over the course of this Parliament. Their target will require a significant focus on building more social homes, and if it is conducted successfully, the economic impact could be substantial.
This is according to a New Economics Foundation (NEF) report - Building the homes we needwhich argues that the economic and social value of investing in the social housing sector is an opportunity to tackle the housing crisis while simultaneously generating a sound financial return on public money.
As it stands, the housing crisis has reached critical levels. Housing insecurity is on the rise, house prices are continuing to increase, record levels of homelessness have been reached, and local authorities are experiencing increased strain to provide temporary accommodation.
The report calls it a ‘broken’ system which is failing to deliver on fundamentals, and calls for a dramatic increase in housebuilding, particularly of affordable homes for social rent.
In order to achieve its target, building at least 365,000 social rent homes over the next five years will be crucial not only to addressing the housing crisis and providing much needed security to families across the nation, but also to unlock significant economic benefits and fuel economic growth.
As the Labour government embarks on this challenge, the volume of research – this NEF report included – all points to the same conclusion: Investing in social housing is a pivotal step in delivering the government’s housing goals and creating a fairer, more robust future for its citizens.
HOW SHOULD THE TARGET BE APPROACHED?
Today, the demand for social housing is staggering, with 1.3m households on council waiting lists and 117,000 in temporary accommodation. Despite these numbers, the report highlights that only 158,000 homes in total, out of a target of 300,000, were built in 2023/24, and current estimates forecast that only 170,000 homes per year are likely to be built by the end of the decade.
The antidote is to build more social housing developments. Not only does this sustain housebuilding, including skills, jobs, and capacity in the construction sector, but the report also points to the Letwin Review, which demonstrated how mixed tenure developments accelerate build-out rates because of the speed with which they can be “absorbed” into local markets.
“Increasing grant funding to build more social and affordable housing is therefore the most direct policy lever the government can pull to generate the demand required to hit their overarching housebuilding targets,” the report states.
According to the analysis, England must build 90,000 social homes by 2027/28, and deliver 110,000 new social homes by the final year of this parliament to ensure 1.5m homes are built.
IN TOTAL, AT LEAST
365,000
SOCIAL RENT HOMES WILL NEED TO BE BUILT OVER THE NEXT FIVE YEARS TO HIT THIS TARGET.
Furthermore, in order to address the backlog, similar numbers of new social homes will need to be maintained for a decade after the target’s end date.
However, these calculations are only the starting point, as they depend on the private sector building 240,000 homes by the final year of this parliament. If these numbers aren’t achieved, then social housing will have to make up an even greater volume of the total 1.5 million homes target.
INCREASED GOVERNMENT FUNDING IS ESSENTIAL
Of course, competing targets impede on social housing providers goals to supply more homes. The ambition to decarbonise, for example, means that existing homes need to be retrofit in order to meet net zero targets. Increasing awareness and concern about the dangers of damp and mould mean that social landlords are investing more into preventing and addressing these issues.
Unlocking funding to enable social housing providers to build more social homes, the report argues, is therefore essential to meeting targets. With previous NEF research arguing the need for a longer term Affordable Homes Programme (AHP), this is something that was addressed in the Autumn Budget, with it slated to increase to £3.1bn, as well as £3bn worth of support and guarantees provided to increase the supply of homes and support small housebuilders.
“Without investment in a new generation of social homes, the likely upper limit of what the market can deliver on its own means these homes would be extremely unlikely to be built at all, rendering it all but impossible for ministers to meet their housebuilding targets,” the report stated.
ECONOMIC RETURNS ARE THERE FOR THE TAKING
When it comes to calculating the economic returns of building this quantity of social housing, the report calls for an alternative approach to accounting to the Treasury’s traditional Green Book method which “better reflects the specific nature of this investment in social housing.” As such, the report’s calculations depend on the application of a 2.0% social discount rate (SDR), compared to the Treasury’s 3.5%.
The bulk of the economic gains calculated come from construction and management. The report argues that building 110,000 new social homes will generate 172,000 jobs in construction in 2028/29, 175,000 roles within the supply chain, and 89,000 induced jobs. As such, for every £1 generated directly, a further £1.43 is generated indirectly and through wider spending in the economy.
In total, our research shows investment in this programme of new social homes would generate £107bn from construction. This is on top of a £91bn total boost through the additional housing management activity (including 12,500 more jobs) over a 30-year period, which would be generated through the existence of a bigger social housing stock.
Furthermore, creating additional social homes will generate a tenure shift, with households currently residing in the private rented sector making the switch to social housing, creating savings over 30 years of £19.7bn of public money spent on housing benefits.
Access to employment opportunities, combatting homelessness, better educational outcomes, reducing crime, and mitigating housing-associated health risks, were also cited as having significant indirect economic benefits, demonstrating the extent to which housing forms the basis of a healthy economy.
In total, the report estimated that building 365,000 social homes over the next five years would yield total gross economic and social benefits of around £365bn over 30 years.
Taking into account the central government grant and local authority expenditure, the total benefit of this investment would be £225bn over three decades.
EVERY £1 OF THE UPFRONT PUBLIC INVESTMENT REQUIRED TO DELIVER THIS PROGRAMME GENERATES MORE THAN £2.60 FOR THE WIDER ECONOMY IN RETURN.
Ultimately, the NEF demonstrates that effective investment into social housing has the potential to address the current housing crisis at the same time as driving long-term economic growth for years to come, and illustrates the impact that social homes have not only on those that live inside them, but on the wider economy and population.
£60M INVESTMENT FOR RURAL HOUSING ASSOCIATION CONNEXUS
Connexus has secured a £60m private placement with a UK investor to support the development of hundreds of new affordable homes and improve existing properties.
The transaction is structured through maturity periods of up to 15 years, with fixedrate interest costs allowing Connexus to more easily manage its long-term financial forecasts and treasury management commitments.
Connexus, which has more than 10,000 homes across the West Midlands in Shropshire and Herefordshire, worked to broker the deal through Lloyds, treasury consultants Savills Financial Consultants and with legal support from Anthony Collins Solicitors.
INVESTMENTHOUSING
Connexus, which has more than 10,000 homes across the West Midlands in Shropshire and Herefordshire, worked to broker the deal through Lloyds, treasury consultants Savills Financial Consultants and with legal support from Anthony Collins Solicitors.
KATE SMITH CONNEXUS CHIEF EXECUTIVE
Kate Smith, Connexus chief executive, said: “This investment is a huge vote of confidence in Connexus, and will help support homes, jobs and the wider economy in our rural heartlands.
“It will enable us to make good on planned commitments to deliver hundreds of new affordable homes over the next decade as well as supporting major refurbishment programmes, aimed at bringing older homes up to a modern standard.
“The positivity and engagement from investors and partners throughout the process has been really encouraging. It shows there is a strong collective appetite to invest in housing associations, who will play a pivotal role in delivering tens of thousands of new affordable homes over the course of this parliament and beyond.”
Andrew Cooke, director of resources at Connexus, said: “This investment will have a profound impact for our customers, helping them remain safe, warm and supported in their homes.“I am very grateful to our investor and partners at Lloyds, Savills Financial Consultants and Anthony Collins for their support. Connexus looks forward to a great relationship with our investment team going forwards.”
Rory Brown, Director of Private Placements at Lloyds, said: “Connexus is a leading voice for rural affordable housing, and we are proud to support them with this important financing, which will allow new investment to continue providing good quality and sustainable housing in the UK.”
Joe Atkinson, Associate Director at Savills Financial Consultants, said: “We have worked closely with the team at Connexus to provide independent advice and support through this critical funding process.
It is really pleasing to see the result, with Connexus welcoming a new investor relationship, following a heavily oversubscribed bid process.
This transaction offers certainty for the organisation and important funding to support tenants across Shropshire and Herefordshire.”
Jon Coane, partner and head of funding at Anthony Collins, said: “Social purpose is at the core of our work, so we’re thrilled to support Connexus in such an important transaction which will allow them to develop more social housing, improve existing housing stock and help address head on the current housing crisis.“As a firm passionate about improving lives, communities and society, this opportunity to support rural housing association Connexus means a great deal to us.”
Connexus is a rural housing association which provides over 10,000 affordable rented homes and associated services.
With its heritage in Shropshire and Herefordshire, it strives to be a trusted landlord that values its customers and colleagues, makes a positive impact, and enhances the lives of those living in its communities.
As well as being a great place to work, Connexus aims to build a customer focussed culture delivered by one team embracing a shared approach.
Lloyds is part of Lloyds Banking Group, a leading UK-based financial services group. Its purpose is Helping Britain Prosper, and it does this by creating a more sustainable and inclusive future for people and businesses, shaping finance as a force for good.
This includes helping people access affordable, quality and sustainable homes. Social housing is an integral part of the UK’s housing landscape with millions of people benefiting from stable and genuinely affordable homes.
The Group is proud to have championed social housing for decades. Since 2018, this includes more than £18.5 billion of funding to the sector, working with over 340 housing associations of all sizes. This investment is a huge vote of confidence in Connexus, and will help support homes, jobs and the wider economy in our rural heartlands
Maximising the Potential of Sustainable Tech in Today’s Housing Landscape
With Will Heinzelmann and Ian Rose, Passiv UK
Q. What is the need for innovation in the current housing landscape?
Will: There’s a lot of focus now, particularly with the future home standard coming in on how we decarbonise our homes and we’ve seen Labour’s commitment to accelerating decarbonisation, particularly in terms of power generation connections on the grid. That’s going to mean a significant shift in terms of the types of homes that we’re building, but critically the experience of the people living in those homes is going to be different. To live in a home with low carbon heating and some generation on the roof and perhaps some storage for that generation, compared with living in a home with a gas boiler. Primarily, technology needs to make this a better experience for that consumer, who’s acting within that transition.
Ian: On the journey to decarbonisation, we need people to love this stuff. I think in the last 10 years we’ve seen that with electric vehicles. There were a lot of naysayers 10 years ago. Nowadays, most people think electric vehicles are wonderful because they’re really fast, they’ve got great technology, they’re very comfortable. I think the challenge with heat pumps will be a bit bigger. They’re not quite so exciting. But you want people to go on that journey where they come out saying solar panels are great, heat pumps are great, battery storage is great, and really embracing that transition to net zero.
Q. How do we get over the hurdle of slow adoption of heat pumps?
Will: I think there’s a number of different challenges with heat pumps. The main one is having the available workforce. The workforce just isn’t there for heat pumps at the moment, but that’s partly a result of the small numbers being installed. It’s a bit of a chicken and egg thing, right? What needs to come first? For us, one of the biggest challenges is controls. There really isn’t something designed specifically for heat pumps, so that presents a bit of a challenge for people trying to adopt heat pumps, because if a large part of the experience they actually have is with interacting with a control system, if that touch point is a really poor one, then that’s going to cause problems for heat pumps. People are going to have a poor regard for them.
Ian: There’s a lot of talk about trying to explain to the consumer how a heat pump works. [People say,] “They’ve got to understand how it works. We need an education programme so that everybody understands heat pumps,” and I guess I’m fairly fundamentally opposed to that view, which is, did they really understand how their boiler works? I think the idea that everybody has to understand the engineering behind how heat gets delivered is false. The thing that they want is to not have to care about that stuff. Getting away from this idea that your average Joe Public cares about grid operation and how the assets in their home need to interact with that is a bit of a fool’s journey really, because we’re never going to climb that mountain of getting people A) interested and B) educated. So make it easy, make it as simple as possible, make it available to all that’s really important.
Q. Where does the Passiv Smart Thermostat come into the UK’s decarbonisation journey?
Will: It’s a smart thermostat designed specifically and only for heat pumps. The thing that we do quite differently from other thermostats is, whereas they will just be turning a heat pump on or off, we get down to the lower level of the heat pump so we’re actually continuously controlling its flow temperature on a dynamic basis. The flow temperature is the thing that impacts the efficiency of the heat pump, so if you’ve got a lower flow temperature, a lower temperature of water going from the heat pump into the radiators, it means your heat pump’s not having to work as hard. Not having to work as hard means you increase your efficiency. A higher efficiency means a lower bill and that’s really, really important for a heat pump, controlling that flow temperature. What we do improves the efficiency by 17% which is a really significant increase, and a very meaningful reduction on someone’s energy bill.
Anyone who’s getting a heat pump, not just early adopters but the people moving into new build, the people moving into social housing, the people getting it retrofitted to their home, it’s a product that works for all of them.
Q. What are the future benefits within the social housing sector specifically?
Ian: Social housing is a really interesting situation because you’ve got to make it really easy. Our product is at its best when it’s connected. It’s getting the weather forecast data, it’s looking ahead to optimise that flow temperature and deliver you the lowest cost. It’s best when it’s got access to some variable tariffs because then it can go and hunt low cost energy for you. It’s best when it can trade your flexibility and generate income for you.
WE NEED AN EDUCATION PROGRAMME SO THAT EVERYBODY UNDERSTANDS HEAT PUMPS
All this stuff requires a connection to get you going and there’s a lot of focus on fair outcomes. Look at what the EU is doing around their decarbonisation journey and they have a number of pillars and absolutely core to that is equality and fairness of outcome. And social housing for us is one of those opportunities where technology can be applied to help achieve that.
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Thiscompetitionwindowcloseson25/11/24,itwill provide fundingforprojects overthenextthreeyears (2025/26to2027/28).
The WarmHomes:SocialHousingFund offersRegisteredSocialLandlordsasignificantopportunityto decarbonisetheirportfolioswhiletakingresidentsoutoffuelpovertyforgood.Groundsourceheatpump technologyoffersunparalleledefficiencyandcarbonreductionthatcanachievethesegoals. Kensa’sexpertscanhelpyouidentify potential projectsanddevelopthebestfundingapplications.
