NHF Finance Conference - 2018: the highlights
15/03/18As the curtain falls on the 2018 NHF Finance Conference, I found myself dwelling on what I have learnt over the last two days here in Liverpool.
There were a lot of great sessions but, for me, the key messages were:
1. Austerity has been hitting hard. Government borrowing is down from £1 in every £4 to £1 in every £18 but is still at 86% of GDP, costing £47m per annum to service that debt. Interest rates are, however, likely to remain low making this less of a concern. Productivity needs to improve, supported by investment is skills and training.
2. RPs “need help to supply rather than help to buy” - the Government is being asked to support more development through relaxing restrictions on where to build and allowing councils greater borrowing freedoms.
3. Regionalisation is expected to have a profound effect on housing, with Manchester and the West Midlands leading the way.
4. We are operating in a new financial landscape: Brexit is creating uncertainty in the financial markets, and this is set to continue. Will EIB investment be replaced?
5. The fundamental business model for most RPs is now based on a mixed tenure offering. This increases the market that RPs are building for, enabling them to build faster.
6. Smarter asset management is needed to use portfolios to their best advantage. Even if they have grant, RPs should maintain their own cross-subsidy to deliver their social purpose.
7. Post-Grenfell, we need to move away from demonstrating compliance with standards set by others to accepting responsibility for the safety of residents. Board members should be asking “how can we evidence that our buildings are safe for our tenants to live in?”
8. RPs are largely footing the bill for post Grenfell remediation works themselves, despite being entitled to ask leaseholders to contribute. Some ideas were mooted around how the Government could contribute to the cost: either through cancelling the final year of the 1% rent cut in 2019/20; or by not charging VAT on remedial works.
9. Innovation following de-regulation: Red Kite offering rent flexibilities where rent is set at 30% of income and can respond to changes in financial circumstances.
10. Be ready for the extension of Universal Credit in 2019. Offer support and advice to tenants in advance.
All of this set in a political backdrop where housing is seen as more important than ever before. Can the Government provide RPs with the tools needed to deliver more housing to those who desperately need it?