David Montague

Our financial strength allows us to make a lasting difference

David Montague tackles the perception that L&Q and other large housing associations have lost their social purpose
Published on 10/05/2018

Last Saturday I took my son out for a meal. He is a Corbynite musician and flocks with birds of a feather.

These days you have to be super famous before you can make a living out of music.

That long list of bands you see on festival posters are all likely to be holding down other jobs to pay the rent, all except for the two or three whose names are much bigger than the rest.

My son told me that he was speaking with a fellow struggling artist who, by day, worked for a London-based housing association.

The sector, his friend said, was losing its social purpose. They were all chasing the money. And way out in front was L&Q.

At this point my son didn’t mention where his dad worked. But he was keen to hear my opinion.

This year, like every other year, L&Q will post a big surplus – the biggest in the sector. If we were quoted we would be a FTSE 50 company, bigger than most on your high street. But we are not quoted – we are a charity.

Our vision is to ensure that everyone has a quality home they can afford. And our average rent is less than half the market rent.

What people see is the surplus. What they don’t always see is what we do with it.

In London we have committed to a 20,000-home strategic partnership with the mayor, and 40% of those homes will be either market sale or market rent homes.

We will make a profit on those homes and use every penny to invest in the other 60%, which will be genuinely affordable. Who decides what genuinely affordable means?

The mayor; our local authority partners; and, guided by what we believe as a charity our residents can afford, L&Q.

The same rules apply to our entire development programme. We aim to provide 100,000 new homes in the next ten years, of which a minimum of 50%will be genuinely affordable. And the debate inside L&Q right now is how we can push ourselves to do even better than that.

And it’s not just about new homes.

Our mission is to create homes and communities that we can be proud of. Our financial strength allows us to reach beyond bricks and mortar, beyond new build to make a lasting difference to the place where we live and work.

So, yes, we make money by providing homes for sale and market rent, but as a charity we invest every penny back into homes and communities.

The economists call it redistribution, I tell my son.

But for me it’s about much more than the model. It’s about our values and our purpose. I know from my own childhood how important it is to have the security and affordability that social housing provides.

I dread to think how different my own life would have been if I had grown up in the private rented sector, if every penny my parents earned went to pay the rent, if we never knew where we would be living from one month to the next.

If anything positive can come from the Grenfell tragedy, it is that every housing association, local authority and politician is now rethinking the role of social housing.

Some will say that it remains a safety net, some will say we need less, not more.

Some still believe that the answer to all of life’s problems is homeownership, and as a homeowner myself I know that it can provide the same security and stability that a council home offered my parents.

But increasingly our aspiration is that social housing isn’t seen as housing for the poor but as housing for everyone – a crucial part of the whole, something we should invest in and be proud of.

If you look at London Living Rent, the mayor’s Rent to Buy product, last February L&Q launched the first 88 homes from a 243-home project.

For a three-bedroom apartment we are charging £1,000 per month; the full market rent would be around £2,500. Available to anyone working in London with a household income of less than £60,000 it was little wonder that we had more than 800 applications for 88 homes.

In London Living Rent I see the opportunity to rebrand social housing, to make it housing for everyone.

And by doing so we can eliminate the stigma which has plagued social housing for decades.

I work for a housing association because I want to make the world a better place, because housing associations in partnership with others can get things done, because our model and our purpose can be life changing. Something every Corbynite musician should be writing songs about.

This blog was first published by Inside Housing on 8 May 2018

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