Housing providers are embracing diversification but worry that it could adversely affect the delivery of core services.
A survey by insurance company Zurich Municipal found that 89% of the housing managers who responded believed housing providers needed to form partnerships with other public and private sector organisations in order to secure their future role. The research, conducted ahead of this week's National Housing Federation finance conference, also showed that a majority had already done so.

But almost two-thirds of those surveyed feared diversification into new service areas could have an adverse impact on the delivery of existing services to tenants. A third thought further further diversification could be hampered by an aversion to risk.

Only one-third of the associations had no plans to diversify, with most entering partnerships with health and social services, or undertaking crime reduction and antisocial behaviour work.

However, the survey showed that the sector was well placed to manage risks with 79% of providers having strategies in place.

Respondents said the key risks for associations were changes in government policy and funding, including housing benefit, and staffing problems.

But Keith Exford, chief executive of Affinity Homes Group, said sensible diversification could help to reduce risk. The association had been advised to diversify by credit agency Standard and Poors.

He said: "It carries risk not to have a range of products rather than a single product."

Bob Wilson, policy officer with the National Housing Federation, said registered social landlords need not fear diversification: "They are right to consider it as an area that requires risk management but provided they do that right there shouldn't be a cause for concern."

Don Wood, chief executive of housing association London & Quadrant Housing Trust, said risk management in the sector had improved greatly over the last five years. "Risk management is recognised as a discipline," he said. "Every association has its own mix of skills, ambition and experience and should play to its strengths."

He warned: "Know how to get out when you have made a mistake. Develop some criteria by which you will know whether you are successful or not."

Source

Housing Today