Benefits Changes/ Housing related
I wrote this for some friends Date 26 Jul 2011
Subject: Housing
Subject: Housing
There are many
different issues around the provision of social housing. I will show
ONE aspect of operational issues currently in this piece.
Currently Social
Housing is provided by “Registered Providers” and it is a highly
regulated sector within housing.
Within that, people
should be provided with a Decent Home, and a lot of Social Housing
stock still doesn’t meet the Decent Homes Standards.
So Providers seek
finance when taking on stock. Providers have Lenders feasibility
issues and proofs to provide in order to gain finance to provide
homes - based usually on a 30 yr business plan. This must build in
any Investment and Improvements requirements.
This business plan and
finance is not affected directly by Government policy in theory.
Loan, Rent, Repay. Very structured.
However, providers
understand that typically they have a needs group of tenants that is
indeed different than any other sector in housing and high
proportions of these tenants may be dependent on Government
Assistance with their housing cost – Housing benefit.
To recap “The
Lending” is based on the Registered Provider submitting sustainable
business plans and income forecasts.
When Government decides
to change Housing benefits this start a cascade of concern within
Registered Providers and could POSSIBLY end up eventually at the feet
of the Lenders.
There is currently a
huge void in understanding what the financial impact of proposed
government changes will be. Impact Scenarios are being constructed
within most Housing Providers.
Some concerns become
detailed : Under occupation is now a huge concern. Where do they go
to? Are there properties available? Do they move? This is part of a
huge set of concerns that the Provider must address.
*Rent shortfalls due to
benefits changes will affect services to all tenants. *
So now more than ever
Value for money in every aspect of operation is now more important
than before.
Most people in Social
Housing Provision ,and even a lot of tenants too, do not want the
Universal Credit proposals to happen where Housing Benefit is paid to
the Tenant. There will be an increased rent income risk caused by
this.
Comments
Post a Comment