- Gowling WLG's research finds almost all (96 per cent) of surveyed housing associations will make savings in the next 12 months
- Three quarters (76 per cent) are currently undertaking commercial build-to-sell housing development activities to generate funding
- Report calls for updated planning regulations for housing associations - boosting commercial revenues and helping the housing crisis
Insight gathered from Gowling WLG has revealed that ongoing planning and funding issues are affecting the ability of councils and housing associations to meet the demand for affordable housing.
Following the release of its white paper today, the international law firm's survey of 50 UK housing associations has found that cost reductions are a big concern for the sector and compounding the housing crisis.
According to the research, nine out of 10 (92 per cent) of housing associations consider themselves 'under pressure' to cut costs in line with Government funding decreases and austerity targets, whilst almost all (96 per cent) of those surveyed are to tighten expenditure in the next year, with eight out of 10 (82 per cent) set to lessen staffing and three quarters (74 per cent) to reduce maintenance spending.
In addition, eight out of 10 (84 per cent) stated that additional welfare cuts from the Government will further impact their organisation. The Government's recent Social Housing Green Paper 'A New Deal for Social Housing' focusses on the management of social housing rather than the supply, with no apparent public funding solution in sight.
The research findings confirm that housing associations are combatting this lack of funding by entering the build-to-sell market, with three quarters (76 per cent) of those surveyed stating they currently undertake this commercial activity to leverage alternative income. However, two thirds (68 per cent) of those surveyed believe planning inflexibility impedes their ability to build, while six out of 10 (62 per cent) think leniency surrounding their Section 106 obligations would help them develop commercially successful schemes.
Jacqueline Knox, partner and social housing expert at Gowling WLG, added:
"Our findings show that the appetite and potential for housing associations to build more homes is there, but the research also suggests that, for most, significant steps need to be taken to allow them to make a really meaningful impact. Planning reform that helps housing associations to make the most of their potential influence in the build-to-sell market - and by doing so to cross-subsidise their affordable housing schemes - could be a significant contributor to delivering more social housing.
"In light of these findings, relaxing of planning obligations for not for profit housing associations at a national level could provide a feasible option to unshackling prohibitive restrictions on housing associations. Changes that would have a significant impact could include: improved access to planning officers, changes to speed of planning consent, relaxation or abolition of Section 106 obligations, prioritised access to public land and financial support for brownfield remediation works.
"It may seem counter-intuitive that relaxing planning for housing associations could enable them to better fulfil their social objectives, but without a dramatic sea-change in the public funding of housing associations, facilitating successful commercial profit-making functions is likely to be key to driving further investment in affordable housing."
The research undertaken by Gowling WLG also goes on to discuss how devolution will play a role in helping housing associations build-to-sell, with eight out of 10 (80 per cent) surveyed stating that devolution will benefit their organisation.
Jacqueline Knox added: "As a sector we need to come together to make this a reality; with housing associations, national and local policy makers and legal teams able to come up with creative solutions all having key roles to play in shaping the future of affordable housing in the United Kingdom."
For a full overview of the research conducted with housing associations, including insight into what planning for housing associations could look like moving forward, see Gowling WLG 's report - Housing Associations: Time for new rules as well as a new deal?