Working together to build more homes people can afford

2 June 2017 | 2 June 2017

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It doesn’t feel long since the last general election, but the political parties are out again campaigning hard for votes. But what’s been great to see this time around is that housing is high on the agenda and nearly all politicians agree that we need far more homes, and in particular affordable homes.

This is becoming more important in meeting the growing housing need among our young people. In our recent study, Capping Aspirations, into the housing challenges facing under 35s we found this group are being increasingly locked out of decent, affordable housing.

This is why we’re supporting the NHF as they set out to future MPs the importance of housing and how we can best work together to build the homes we need.

Their asks focus on six main areas affecting housing right now. One of these is to build new homes, and it would be difficult to deny that we have a shortage of housing. But it’s not easily solved.

One of the main issues we have at Sovereign, working in high value areas, is affordability. With benefit cuts, stagnating wages and house prices at a high, social housing is becoming more important as more and more people are unable to buy or afford private rent.

The NHF has pledged that housing associations can build 250,000 homes over the next five years.

Government can certainly help us achieve this – with freedoms, investment and land – but this is also about what we can do differently as a sector.

We need to build, but we need to build the right homes at the right price.

As a sector we can work more efficiently, generating surplus to reinvest or creating borrowing capacity to help us build more.

At Sovereign, we’re committed to our social purpose and building affordable homes. Our model for funding development may be a bit different as we’re focused on building for social and affordable rent as well as shared ownership. We’re aiming to build 15,000 homes over the next ten years – with more than 13,000 of these for affordable rent and shared ownership.

We’ll make up the balance with some homes for open market sale or rent to help provide subsidy, but that means 9 out of every 10 homes we build are affordable. We’re pretty proud of that.

This is possible because we have a strong business, decent surplus and great reputation with investors – but also because we’re making the most of joint ventures.

Through joint ventures with major housebuilders, we can share the risk and the reward, and so we can commit to longer term projects than we could working alone. They bring house building and development expertise together with a competitive supply chain, while we offer the skills in affordable housing and, as a large housing association, investment and influence too. When the homes are built, we take on the management of the affordable housing, so we have a long-term commitment to the development, the community and our residents.

Over the next ten years, not only are we going to build 15,000 new homes and invest some £225m per year, but we’ll also keep our focus on the right level of rent and the right balance between affordable and market housing.

The majority of our programme is affordable, and our social purpose is at the forefront of our commercial business decisions. We fully support the NHF’s call for the next government to work with housing associations to deliver their ambition, building those much-needed, genuinely affordable, places to call home.