Housing
Margaret Beckett

The Rt Hon Margaret Beckett MP

Minister of State

Minister for Housing and Planning, attending Cabinet

The role of Housing Associations in responding to the economic downturn

Date of speech 3 March 2009
Location The Hotel Russell, London
Event summary National Housing Federation's Leaders Forum

Draft text of the speech - may differ from the delivered version.

As you'll know - because many of you will be directly involved - the Tenant Services Authority is currently holding its national conversation with tenants.

It's not exactly your average consultation: the pink camper van is pretty hard to miss on its way around the country. And a couple of weeks ago, they made a stop in my own home town of Derby.

Tenants from the local housing associations including Spirita, Home Group and Derwent Living turned out to have their say: and their views are now, apparently, up on YouTube for the world to hear.

It's really positive that, despite the problems mentioned; overall, tenants are happy with the service they get: and believe that there are further improvements to come.

This isn't yet a scientific analysis, of course. But it certainly confirms my own experience of housing associations as a powerful force for good within the local community.

A housing association home is really something to prize.

The consistently high quality and excellent standards of service on offer mean that housing associations have a wide appeal to a huge range of people in different circumstances:

  • from young couples just starting out
  • to growing families
  • to the elderly and more vulnerable.

Far from being distant and impersonal organisations doling out housing from on high, the best housing associations offer individual and responsive services to families.

They play an increasingly active role in the wider community; tackling longstanding problems and contributing to a renewed sense of morale and pride.

And as your services have diversified over recent years, we've seen increasing interest in what you've got to offer.

People are attracted not just by the traditional stability and certainty you find in social housing.

But also by the prospect of a more sustainable and affordable route onto the property ladder.

The choice and flexibility available is also very appealing.

Housing associations don't just give you a fixed, standard 'take it or leave it' package.

As your circumstances change, so do the choices available: with options to buy a share in your home as your career progresses; or to downsize if you encounter hard times.

These characteristics: your broad appeal; your strong role within your community; your pragmatic approach, are in high demand at the moment.

They mean that you are ideally placed to offer leadership through the current economic downturn. And also to help to shape a fairer, more effective housing market for the future.

There is no doubt that housing is among the sectors which has been worst affected by the present economic crisis.

And the first step has necessarily been to address the underlying causes of that crisis.

  • by stabilising the financial and banking sectors
  • by boosting people's spending power.
  • by offering real help now to the families and businesses which need it

But of course, it's also crucial to take proactive steps to intervene in different sectors of the economy.

In housing, that's where I come in. But it's also where you come in.

An effective response to this downturn demands not only government action. It requires a concerted partnership between the public and private sector; working together to try out creative approaches.

Government can set the direction, provide the funding, and cut red tape where it's holding you back.

But equally, interventions from Government have got to be matched by a proactive local response.

Burying heads in the sand and waiting for the storm to pass isn't going to cut it.

Where-ever possible, we've got to take action to help lessen the impact and length of the down turn and lay the foundations for recovery.

There are three areas which I have been concentrating my attention and effort: preventing repossessions, helping first time buyers, and in keeping supply on track, helping to support the construction industry.

And it has been extremely encouraging to see the way in which imaginative housing associations have sought to take up the gauntlet in each of these areas.

Take preventing repossessions.

We are putting in place a comprehensive package, made up of five elements, to support as many people as possible.

With stronger debt advice services. A three month minimum waiting period before lenders seek to repossess. More help for job seekers at risk.

And two new schemes: homeowner mortgage support for those in short-term difficulties and mortgage rescue for the most vulnerable.

Housing associations have played a critical role in helping to get their local mortgage rescue scheme off the ground.

They are gearing up to step in and help families before their situation becomes desperate.

And now the scheme is fully up and running, I expect to see the first families getting help very soon.

Secondly we've been working to offer new help for first time buyers.

We've seen growing interest from these schemes among those who can't otherwise afford to buy; because they can't call on the generous support of family or friends to scrape together a deposit.

We know that they've been among those hardest hit by the lack of lending.

Instead of poring over the property pages with growing frustration, these schemes offer them a realistic chance of getting on the ladder: with knock on benefits for the rest of the market and the construction industry.

In particular, it has been really encouraging to see Home Buy Direct getting off the ground.

We've now identified more than double the homes we had expected for this scheme, including some from housing associations like London and Quadrant.

And it is extremely encouraging to see the degree of local innovation, with housing associations developing schemes in response to local demand.

For example, Bromford Housing has a 'try before you buy' scheme in Shrewsbury, Walsall and Wolverhampton. It's being run along the same principles as the national 'rent-to-home-buy' pilot programme.

Prospective homeowners benefit from paying eighty per cent of market rent so that they have time and extra cash to save for a deposit.

When the time is right, they can buy anything from a twenty five per cent share to the whole house.

A similar scheme is being run by Great Places Housing Group in Greater Manchester and Lancashire.

I think this idea of rent-to-buy has real potential, and I would like to see more housing associations taking up this option.

I think it offers a particularly sensible solution for housing associations who are finding it difficult to sell stock at the moment. Why not convert that stock for use as part of this scheme, rather than leave it empty?

Finally, it has been tremendously encouraging to see the way that some housing associations have been acting swiftly and proactively to keep affordable housing schemes in their area on track.

In the East Midlands, a number of housing associations have joined forces with the developer Westlands and the HCA to bring forward new developments.

In the East, Flagship Housing Association have been working closely with Persimmon and other local builders: both to keep schemes on track in the short-term and to explore the potential for longer-term collaboration.

For our part, government has responded to the downturn by bringing forward spending planned for later years.

That includes £550 million for new social and affordable homes.

£275 million for the decent homes programme and for repairs and maintenance works.

And substantial funding to buy up unsold stock from developers. We've now spent almost all the original £200 million set aside for this project, for almost 5, 700 homes.

All this is essential to keep skilled workers in jobs, and construction firms open for business.

Looking back over employment figures through the nineties, you see a sharp drop in those employed which doesn't really recover until last year.

Basically, people left the industry and just didn't come back.

This time around, we need to do every thing possible to maintain the capacity in the industry, so that when the upturn comes, we have both the numbers and the skills in the workforce to press ahead with the necessary building programmes.

Tenants will continue to reap the benefits of improvements to their homes, with a better quality of life.

And we can also bring forward much needed affordable housing sooner; helping to meet demand and reduce pressure on waiting lists.

This is an area where I believe that housing associations could be going even further: particularly in working with the HCA to bring forward homes for social rent.

I recognise that these are uncertain times. That, like other businesses, you are facing difficulties because of a lack of access to credit. And that as private development has declined, so too have section 106 receipts.

But overall, the sector is financially sound. While it is right to be cautious: it is essential that doesn't become an excuse for paralysis.

This is not the time to be excessively risk averse: but to look for new opportunities - the freedom, flexibility and funding that I was talking about before.

For example, some housing associations are already building on their success in the social rented sector by exploring new opportunities in the private rented sector.

This increases the choice open to tenants and potential tenants, who welcome the high standards on offer from such experienced and professional landlords.

Providing this can be effectively combined with their core responsibilities, this certainly offers interesting food for thought for the future.

And if you feel there are other ways in which Government could support you, then I am always open to new ideas.

So in summary: in each of my three priority areas:

  • helping to prevent repossessions,
  • supporting first time buyers,
  • in maintaining momentum on supply

I see housing associations as an important part of the answer.

But I don't believe, by any means, that's where your contribution ends.

Your role is not just to pick up the pieces. But to help reassemble those pieces into a fairer and more effective housing market for the future. Where more people get the good quality homes they need and deserve at a price they can afford.

We all know that the longer-term challenges remain the same. The aging, growing population is still continuing to age and grow: there is no evidence that demographic trends are changing.

Equally, the urgent threat of climate change - perhaps the most profound global issue of our time - has not gone away.

Neither of these challenges can be simply stored away for later, when we think we've got the time and money to tackle them.

So everything we do now, to respond to the immediate crisis, has also got to address these wider questions.

Just a few weeks ago, for example, I helped launch the cross-government strategy to reduce carbon emissions from the housing stock.

This is very much a long term investment. But it can also bring real benefits in the shorter term: by cutting people's fuel bills, creating jobs and supporting industry.

The idea is to improve quality of life for everyone: not just those who've got the time and resources to invest in whizzy green gadgets.

Some of what we're talking about isn't particularly glamorous. But just basic measures like insulating the loft and cavity walls can make a big difference.

On average, we think homeowners will save around £300 on their energy bills: a huge relief for people worrying about their family finances in the current climate.

I want to make sure that social housing is at the forefront of these changes. Not least because it houses some of the very people who have most to gain: the elderly, the vulnerable and those in fuel poverty.

But also because by retrofitting social housing first, we can build capacity, develop skills and promote innovation: learning the lessons which can then be applied to the rest of the stock.

We have just established a £10 million retrofit challenge to get this off the ground.

We're looking for forward thinking housing associations to come up with ambitious proposals for retrofitting existing homes to act as exemplars and show the way forward: not just for social housing but in all housing.

So I see housing associations as having a critical role to play here as part of your wider work to raise standards. And I hope that you will join the conversation about how to make it happen.

Finally, while I have stressed today the need for action; the need for reflection is, I think, perhaps even more important.

Over the coming weeks, I will be working with all our partners to consider the lessons of the current crisis, and the implications for the way forward.

I want to make sure that when we emerge from this crisis, we do so stronger; so that we are better able to meet the nation's long-term housing need.

As I've stressed, there are undoubtedly opportunities here, as well as challenges ahead: and I want to make sure that we are taking full advantage of those.

To conclude, I firmly believe that housing associations can play a hugely significant role in responding to the current downturn.

Not only through influencing and implementing national policy; but also in providing practical and tangible support which helps local families and businesses.

It is a tough ask, in these difficult times. But with your firmly established track record of success, and your commitment to further progress, I have every confidence that you will succeed.

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