Flexible working

Legal & General’s plan to launch a housing association comes with a mission statement that goes further than most: to create a sustainable funding model in which institutional investors are long-term holders of social housing assets “working alongside best-in-class affordable housing operators”.

Traditionally, not many housing associations have been ready to give up control and to be managers or partners, rather than owners. Could such a move free associations up to do other things that are more akin to their social purpose?

On a purely financial level, there may be a question of how such a move would impact the billions of pounds of grant funding and debt that are inherently linked to the asset base and rental cashflows. But with new entrants hoovering up affordable housing in the Section 106 market, some associations may well find themselves being forced into managerial roles.

Where they do retain more control is with what they build directly, and how they manage their existing stock.

Peabody’s announcement in Inside Housing that it will freeze and rebalance rents has won much support.

In a time of multimillion pound surpluses, a large association showing it will flex its balance sheet in this way is good news on a number of levels.

Clarion Housing Group – whose predecessor Affinity Sutton was vocal about the unsustainability of affordable rent a few years ago – told our conference that it is also taking a fresh look at its rents. Meanwhile, Karbon Homes’ chief executive tells Social Housing this month that there may well be an argument for making losses on regeneration schemes to help communities, if it is done in a way that does not jeopardise the rest of the organisation.

Taken together, the evolution of ownership and rents could signal a reconfiguration of how the housing association sector sets out its stall.

Whether or not either of these approaches gather widespread momentum, it is a sign that associations are willing to be flexible.

There is a feeling of a changing landscape for housing associations, one where there is more choice, freedom and opportunity.

But the more it stands still, the more the ground will move beneath its feet.