Birmingham University researcher Brendan Nevin told last week's Chartered Institute of Housing annual conference that associations in five of the nine pathfinder areas for market renewal are "critically exposed" to financial risks. He said: "I don't believe all the social landlords will survive this. We will not have the same housing association movement we have today."
Home Group chief executive Malcolm Levi agreed that smaller associations face real difficulties. He warned that this time there may be no bail-out available for some: "They might need to merge, or be taken over. Some larger associations might say they cannot take on a smaller association because it is too weak financially." The result could be associations facing insolvency for the first time.
He said much of the problem had been caused by associations' success buying and improving old terraced housing in the 1970s. That extended 30-year life is now at an end and demand has slumped.
National Housing Federation northern region head Jim Battle confirmed that some associations with such stock are financially "overexposed" but said they were major stakeholders in those neighbourhoods. "Nobody wants to see social landlords go to the wall," he said. "If they are to preserve their investment they must play an imaginative part in turning areas round. They will not look attractive to a suitor if they have high empties figures, so some hard thinking is needed.
"But the federation will work closely with landlords to ensure this transitional period benefits everyone. This is turnaround time."
Source
Housing Today
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