Brace yourself. The financial pressures on RSLs look set to get worse. A variety of warnings this week suggest they could soon be paying more to borrow money. The Housing Finance Corporation says rates could rise as banks try to offset losses caused by the war and general economic slump (page 8); the National Housing Federation says rates could rise because of a government move to pay housing benefit direct to tenants (page 15); insurance costs will rise 25% in the next two years (page 14) … and to cap it all, the government seems to want to cut out the middleman and open up competition for development grants to housebuilders (page 9).

Increased costs and competition are exactly the pressures that firms in the private sector are up against all the time. They would have to reduce costs, put up prices, merge with another company or go out of business. Associations don't have those options: for a start, opportunities for increasing their income are severely curtailed by the government. The solutions they must find cannot be left to the market. They need Whitehall's help behind the scenes to put pressure on lenders. But with the government also expected to make its money go further, and with housing associations fiercely defending their independence, they cannot expect to be completely shielded either. The battle to stop Housing Corporation grants

going to housebuilders as part of its drive to encourage low-cost homeownership cannot be fought on ideological grounds if they take on the development role rather than that of the landlord, if they can deliver homes of at least the same quality for a lower price and if they are prepared to submit to the same degree of regulation. At this stage, though, that's three very big "ifs".

The battle to stop grants going to housebuilders cannot be foughtn on ideological grounds

"Tenants are dead against stock transfer." So says Val Rowling, chair of the tenants' organisation backing Poole council's bid to set up an arm's-length management organisation. Poole is banking on getting ALMO status so it can raise money to meet the decent homes target. We will follow Poole's fortunes in our series on whether the Communities Plan can be delivered (page 22).

Source

Housing Today