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The Housing Corporation is the national Government
agency that funds new affordable housing and regulates RSL’s in
England. Responsibility for the regulation and funding of RSLs in
Wales, Scotland and Northern Ireland is handled by similar
corresponding organisations. Currently, the Corporation regulates
and funds around 1,800
Registered Social Landlords owning or managing almost
2.2m homes – this volume has increased by 100% since 1996. However,
total social housing stock (RSL and Local Authority combined) has
actually declined steadily since 1981 when it accounted for just
over 30% of all UK housing stock to a current level of around 18%,
as illustrated in the chart.
Reasons for this have included; a lack of investment
in social housing during the 1990’s, strong house price inflation
motivating private housebuilding, and the introduction of ‘Right to
Buy’ and other schemes encouraging home ownership.
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The increased use of Large Scale Voluntary Transfers (LSVT)
by Local Authorities comes as a direct result of continued public funding
shortages essential for repairs, maintenance and development of LA housing
stock. LSVTs offer Local Authorities the chance to hand over
responsibility of their stock to Housing Associations who have more
freedom to raise finances from sources other then public funding. With a
current transfer rate of around 100,000 units per annum, the shift in the
social housing mix will continue to lean towards RSLs who will eventually
become the leading provider of social housing – probably within the next
3-4 years.
While there are over 2000 housing association groups in
England, the top 30 accounted for over 800,000 dwellings in 2007,
representing around 38% of the total stock owned by RSLs. Scotland has a
larger public sector housing stock than the other countries – LA and RSL
stock account for a combined share of 25%, compared with 17-18% elsewhere.
While the Local Authority sector continues to account for a major
proportion of social housing in Scotland, stock transfers are becoming a
more frequent activity resulting in strong growth of the Housing
Association market. The top 5 associations have grown in share in recent
years accounting for more than 37% of the total stock compared to only 14%
in 2003/04 - Glasgow HA, alone, accounts for over 27% of the Scottish
social housing market with more than 72,000 dwellings.
Private lending to RSL’s has been allowed since 1988. In
recent years, the amount of private lending to the social housing market
has grown significantly. At the same time, the number of lenders active in
the sector has declined. In 2007, the housing association sector in
England held total private finance facilities of £43.5bn, of which £30.9bn
(71% of total facilities) had been drawn down and this funding will help
finance the large-scale maintenance and improvement budgets in the sector.
A key area of investment for the Housing Corporation has
been to administer the National Affordable Housing Programme (NAHP), which
provides public funding to build and renovate homes. The 2008-2011
programme is the largest investment programme in the Corporation’s
history, with a value of £8.4bn. In addition, housing associations are
also expected to draw down £12 billion of private borrowing to more than
match the Housing Corporation funding.
The NAHP will provide at least 155,000 new affordable
homes in the next three years, of which more than 100,000 are expected to
be for affordable rent and more than 50,000 for sale through the
Government’s Homebuy initiatives. The NAHP target may be difficult to
achieve given the general downturn in housebuilding in 2008, but
affordable housing is likely to underpin the housebuilding market in
2008-09, partially offsetting the worst effects of the collapse in the
private sector.
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