In her latest blog, Thrive Homes Chief Executive Elspeth Mackenzie urges social landlords to step up and acknowledge their role within the wider housing market.
These are exciting times at Thrive as we look forward to the hand-over of our first new homes in Aylesbury over the next few weeks. The affordable homes for rent and shared ownership have been built through our first partnership with a private developer, as part of a large-scale housing development at Berryfields. We are really proud to be ensuring that more people have access to an affordable home.
While these properties result from a 106 agreement, they have been built without any form of government subsidy. Thrive raised the funds to pay for this development based on the value of our existing stock by issuing a listed bond.
But, due to the discounted level of rent they will bring in, they will not pay for themselves for a number of years. So we will have to generate enough additional income to support them for a significant period of time until they do ‘break even’ and start to generate a surplus that supports more homes for people who cannot participate fully in the housing marketplace.
This virtuous cycle is fundamental to our business model that requires stability to deliver. Interruptions to the cycle, for example through Right to Buy, require us to think about other ways to inject subsidy into our organisations.
This highlights the fact that, to continue in our role, we need to recognise our position as part of the wider housing market. We should stop regarding ourselves as a special group of organisations set apart from the wider continuum within the housing sector, from small private landlords to luxury housebuilders.
We mean business
I feel very strongly that we must not be divorced from the real world but acknowledge the need to operate like a commercial organisation in order to succeed in our aims. Any other business would look at their product, identify their target audience, price accordingly and look at ways to offer choice.
But, for that to work, the government has to step back from interfering in housing associations’ affairs. For example, the government is currently trying to control not just our rent levels but also our customers’ incomes by means of welfare reform changes such as Universal Credit.
There needs to be clarification on what the state’s role is in supporting its population and what its mechanisms are for achieving that.
We need to move away from the idea of a social housing landlord as a paternalistic carer. We are the low-cost end of the housing market and provide access to an affordable, well managed product, that our customers want and are increasingly coming to value.
We must manage our businesses coherently and operate more commercially. This way of thinking is becoming more prevalent within our sector, as evidenced by a number of conferences I have been involved with in recent months which have focused on this very subject.
If social housing providers are going to survive, we need to get involved in this debate and face up to reality. Let’s not be dependent but instead get a grip on our businesses and actively promote what we do in a way that resonates with society.