Yesterday the prime minister announced something that could be massive for housing.
For many years local authorities have been calling for the ability to borrow so they can invest in housing, just like housing associations do.
For too long the answer has been “no”, mainly because, in an era of austerity, government wanted to reduce public sector borrowing, not increase it.
Yesterday that changed. And it could be prove to be transformational for the sector.
Look at what housing associations have achieved since we were given the ability to borrow back in 1988.
Since then, collectively we have raised £80bn, invested in our existing homes to meet the Decent Homes Standard and grown our stock to three million homes.
“Look at what housing associations have achieved since we were given the ability to borrow back in 1988.”
Today, the homes we invested in are generating a surplus, giving us the opportunity to reinvest every penny back into more affordable homes and communities. Imagine if local authorities had been given the same freedom – would we be talking about a housing crisis today?
Now local authorities will be able to borrow just like we can. And maybe, finally, everyone will be able to have access to a safe, quality and affordable home.
But change won’t happen overnight. For housing associations, we had to prepare long-term business plans, building trust and confidence among the investment community as we grew.
We had to convince our regulator that we understood the risks and could manage them. We had to convince them that we would remain viable and were sufficiently well governed.
Over 30 years we built our expertise and committed to ambitious plans, but we took one careful step at a time. Not all of us got it right.
A few of us needed help from others.
We were buffeted by the waves of economic and political change but no investor lost out on their investment, and that was because we borrowed and grew responsibly.
I had the great pleasure of being there from the start – I joined L&Q in 1988 as the Housing Act, which allowed all of this to happen, found its way onto the statute books.
And one of the main reasons for our success was partnership. We learned from the house builders how to sell, how to regenerate from other housing associations and we learned how to connect with people and their communities from local authorities.
Eventually, after years, we could do it ourselves. But we didn’t. And we didn’t because we could achieve so much more in partnership.
Today, ours is a partnership model. In London, we are working with the mayor and London Boroughs.
“Now is the time for us to work together with a shared sense of purpose, values and determination.”
We have signed a £100m deal with 12 black and minority ethnic housing associations, we work with 70 support agencies and we have joint ventures with all the major house builders.
Beyond the capital it’s the same story: we are a strategic partner of Homes England, we are working with Trafford Housing Trust to deliver 2,000 homes in Greater Manchester, and we are using the Gallagher land engine to forge a network of partners nationally.
I hope that as local authorities embrace this exciting new freedom, they embrace partnership with equal enthusiasm – now is not the time to go it alone.
Now is the time for us to work together with a shared sense of purpose, values and determination, and to seize a once-in-a-lifetime opportunity to put the housing crisis behind us, once and for all.
This article was first published in Inside Housing