In just over a month we’ll know if the government and GLA have hit their targets - and housing associations will know who their friends are
For those involved in social housing, this is the business end of the development cycle. Though the current Homes and Communities Agency and GLA funded programmes have been running for three years, these last two months are the ones that really matter. Actually, it’s one month and a couple of weeks, because the date for final submissions is 15 March 2015.
At the end of this cycle the reconciliation will be done and the big targets, 170,000 homes across the country, as promised by Grant Shapps in 2012, will either be achieved, or more likely not. A similar, though lesser, challenge faces the GLA in London. There can be no hiding place and political capital will be made by either the victors or the defeated.
Individual housing associations will have made their calculations on whether to give grant back or whether to hold their breaths
Individual housing associations will have made their calculations on whether to give grant back or whether to hold their breaths and hope that landowners deliver on sales agreements; that local authorities deliver on planning approvals; and that developers and contractors deliver the completions, on budget and even more importantly, on time.
I’ve done a few of these cycles in my time and the people within the agencies charged with delivering are vastly experienced at organising housing providers to come up with the numbers. However, an economy that is more difficult to predict creates a more complicated picture for delivery. Developers will be deciding on whether to honour Section 106 commitments or to negotiate for more subsidy or fewer social homes. Various government initiatives aimed at stimulating homeownership make it possibly more attractive to build out for private development, rather than sell to a housing association. And land availability suddenly seems a scarce commodity. Friends at the start of the cycle suddenly seem to be on different sides, when it comes to talking about “doing the deal”.
However, once we get to the other side of the cycle there will be partnerships that will have been made for the long term and that will reap benefits for both developers and housing associations over the coming years. There will equally be relationships that have been soured not just for the short term but for the longer term as well.
I think that they’ll be more partnerships than break-ups, but two and a half months is a short time to prove me right.
Steve Douglas is a partner at Altair