Two years of pandemic and increasing economic turmoil are taking their toll everywhere, and the first inklings of the long-term repercussions for the social housing sector are revealed by the NFA’s latest annual survey.

Delayed new-build programmes and shortages of skill and experience in the labour market are adding further pressure to hard-pressed local authorities. They are already struggling to fund the significant additional costs of complying with new building safety regulations and urgently needed zero-carbon work.

Each year, our members pool the data that gives us a snapshot of how our corner of the social housing sector is faring. Last year’s annual survey – no surprise – was all about COVID-19. Although NFA members have maintained good quality services and supported communities in partnership with their parent local authorities, this year’s survey reveals the emergence of an increasingly complex set of challenges.

These include shortages of jobs in the communities where they are most needed, increasing levels of poverty even for those in work, and worsening mental health.

In many cases, the ALMO housing management organisations that make up the NFA’s membership have tried to combat these challenges by pooling their efforts with councils and other public services, community groups and charities. They have tried to streamline resources, reduce duplication and target services where they are most needed. Three-quarters of our members deliver money advice or financial inclusion services; two in three have services to tackle worklessness and employability.

However, there is no slack left to take in; alongside their parent councils, NFA members are trying to balance too many competing demands on Housing Revenue Accounts (HRA). Unplanned building safety remediation costs and the government’s zero carbon agenda mean there is far less capacity to build the new, genuinely affordable homes that are needed to remedy the housing crisis.  

The short-term nature of funding pots, particularly for retrofit work, combined with the fact that the social housing sector still doesn’t have a long-term rent settlement make it difficult to make long-term plans for the effective use of the HRA.

The NFA and sector partners have repeatedly called for the government to invest in a new generation of genuinely affordable social housing. ‘Genuinely affordable’ means housing which costs less than 30% of the household income.  

The unambiguous evidence of the updated Building Post-Pandemic Prosperity report, published by us and our partners at the LGA and ARCH late last year, showed the country needs around 100,000 new socially rented homes every year to sort out the housing crisis and end homelessness. COVID-19 has only amplified this need. While the government’s Levelling Up White Paper recognises that more genuinely affordable social housing is part of the solution to regional inequalities, it doesn’t suggest where the funding might come from to achieve this.

We suspect our members’ new-build trends are echoed across the social housing sector. The ALMO sector built and acquired 1,501 homes in 2021. That’s an increase in stock across all our members of about half a percent. This is broadly consistent with previous years; 1,666 homes in 2021 and 1,961 homes in 2020. However, the sector sold around 1,484 homes under Right to Buy which means that social homes available to rent – in a booming house sales market – pretty much stood still.

The NFA and its members believe the time is right for a review of the funding streams for council housing

Over the next 12 months, ALMOs have plans to build or refurbish around 2,810 new homes. Over the next five years, they hope to raise that to around 12,300 homes. However, many are thinking twice about these targets – are they viable? Never mind the shortage of skills and funding – what about the sky-rocketing cost of materials?

We do, in fact, have a few ideas about that. Given all these demands on the Housing Revenue Account and the fact that the current settlement only takes us up to 2025, the NFA and its members believe the time is right for a review of the funding streams for council housing.

We want to see:

• A new longer term rent policy in place for all social landlords.
• An increase in the Affordable Housing Programme with more grant available for social rented homes.
• An additional pot of funding to support local regeneration schemes where housing at the end of its useful life can be demolished and rebuilt to new net-zero standards without any demand for additional units.
• A long-term retrofit programme which operates in a similar way to the Affordable Homes Programme, enabling strategic partnerships and continuous market engagement, which would help longer term planning and delivery by social landlords.

An awful lot is being asked of local authorities and social housing providers over the next few years. It promises to be quite a battle – but give us the tools, and we will do the job.