Is it just me, or is there a link between the deals being struck through the Government's National Clearing House to take unsold private homes into the social sector and the recent collapse in new construction orders for social house building?
I ask because I have been doing some analysis and writing for the construction and planning chapter of The Red Book, published by London Residential Research, and have been puzzling over the drop in activity in the social sector.
There are obvious reasons for it that come to mind, such as the decline in Section 106 development and the cash problems some RSLs are facing having sought to cross subsidise their activities with profits from private sales - not helpful in a falling market.
Against this the newly formed Homes and Communities Agency is doing all it can to keep house building on track especially through bringing forward funding for social housing.
But the suddenness of the collapse in new construction work being let in the social house building sector, revealed in the latest new orders figures, suggests there might be something else at work. Everything seemed to be bobbling along quite nicely until the new orders roughly halved in November and December.
My initial thought was: Could the aftermath of the Lehman Brothers collapse squeezing the availability of finance to RSL's be one possible reason?
Then my mind was drawn to the "law"of unintended consequences.
On October 20 last year the Government and Sanctuary Group signed the first deal under the new National Clearing House system, which was backed up by £200 billion. It took 335 homes off the hands of Bloor and in doing so created 335 new affordable homes.
On the face of it a good idea - the Government part funding the purchase of newly built private homes for use as social housing has merit. It gets people into homes and it gets cash to cash-strapped housebuilders, hopefully sparing jobs in the bargain.
But it is not a free lunch for the RSLs. Just in case you are not aware, and it has to be said the Government is a bit slow on pointing this out, but the RSLs have to dip into their pockets quite substantially to acquire the homes, albeit at a substantial discount to what it would cost them to build for themselves.
So looking at the numbers and the hellish slump in social house building work being let I started to wonder about the broader impact of the policy.
Between the signing of that first deal and the end of 2008 more than 4,800 homes were bought in bulk from house builders and developers. Of these 2,700 are flats and the whole deal to the end of the year cost the Government £160 million.
That roughly equates to a monthly acquisition rate of 2,000 or more new homes brought into the English social sector or partially into the social sector through low cost home ownership.
Last year the social sector completed about 22,000 homes in total, or put another way just under 2,000 a month. That was the peak of output since 1997 when the Labour Party came to power.
Unless I am missing something that means that in the last two and a bit months of 2008 the social sector acquired roughly an equivalent number of new homes to the number it would have expected to build over the period.
Now I am no expert on RSL financing. But they will be paying about £40,000 a home through the bulk deals, in broad terms probably a bit below half what they might have spent on building a new home (ignoring for this argument the effect of any grant funding they might get).
So with a substantial part of their new homes budget gone, what are they to do? My guess is build a few less homes, unless of course in these credit crunch days they have some very nice little facility with a very nice little bank.
But as I say, what do I know about RSL funding?