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HAs stress-test for arrears and rent payment holidays as calls are made for government support

Housing association chief executives are reconfiguring business plans and stress-testing against the impact of arrears, potential rent payment ‘holidays’ and a halt to new build in their response to the coronavirus crisis.

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Picture: Getty
Picture: Getty

Housing associations are stress-testing for a jump in arrears and rent payment ‘holidays’ as calls are made for government support #ukhousing

Group of housing association chiefs looks for flexible approaches to support residents but says they are unlikely to cancel April rent increases, as London G15 lobbies government for sector support #ukhousing

The London G15 group – representing the biggest associations across the capital – are lobbying for the housing association sector to be part of the UK government’s rolling fiscal stimulus package.

And while most are reportedly unlikely to postpone rent increases set to take place in April 2020, they are looking to support residents through flexible approaches, according to a newly formed online group of housing association leaders.

Around 140 chief executives are putting flexibility, collaboration and communication at the centre of their action plans to battle the COVID-19 pandemic, according to a new sector WhatsApp group administered by housing consultancy Campbell Tickell.

The overriding message is one of solidarity between social landlords that want to see closer joint working with the NHS and social care, and a greater appetite for pooled resources and joined-up thinking between housing associations and councils.

All of that is aimed at attaching a greater importance to community and supporting those who are isolated.

Some of the key challenges they are facing include new allocations from council homelessness lists, a demand for emergency accommodation for healthcare workers, and difficulties in carrying out gas servicing and compliance work.

This is compounded by an insufficiency of maintenance contractors and supplies and “major problems” with sourcing PPE (personal protective equipment).

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Care homes are in lockdown and housing associations are creating records of older and vulnerable residents, finding ways to provide support and access to food and other essentials.

Brendan Sarsfield, chief executive of Peabody, said: “We are all in this challenging situation together. Now more than ever, we need to share ideas and good practice.

“This group has been an excellent example of housing providers seeing how we can maximise our effectiveness and contribution to the whole country’s efforts to beat the virus.”

Greg Campbell, partner at Campbell Tickell, said that securing key worker status for people on the housing frontline is also a particular area of focus for the group.

And he added that collaboration is being put front and centre.

The group is considering the possibility of procuring a single legal commission together, potentially via the National Housing Federation.


Business and financial planning

The feedback from the group – collated and shared by Campbell Tickell – is that work is under way to rebuild business plans with stress-testing for the pandemic, including a ‘rent holiday’ option and the ability to adjust budgets “last minute”.

Associations are tracking the impact of coronavirus on arrears and are committing to zero evictions, amid concerns about the ability to collect rents, which is the core source of income underpinning their organisations and their financial positions.

Organisations are taking a case-by-case approach with tenants, providing support where it is needed.

That comes as the government revealed yesterday that it has seen almost half a million Universal Credit registrations in nine days. That compares with 160,000 in the three months to January 2020.

A number of providers are also set to reduce housing development, to avoid costly commitments, with a natural impact on sales programmes.

The sector’s biggest builder, L&Q has already joined other volume house builders and construction firms in closing development sites. L&Q is also pausing capital expenditure.

All but essential repairs are cancelled in many cases and fire safety programmes are being kept under review, according to the feedback from the group.

There are also urgent questions around PPE safety equipment – which has been desperately short for NHS workers – and the protection of repairs and maintenance and housing support staff. And the Regulator of Social Housing (RSH) is seeking clarity on compliance.

Housing association leaders are also looking to the regulator for guidance on governance issues, as the rapidly moving nature of the crisis also means “operations are taking precedence over governance”.

Sector leaders are asking their boards to “trust the executive team”, as there have been some issues with boards’ understanding of the impact over the past week. There have been suggestions to have weekly briefings and keep a daily decision log because of the speed of the actions being taken. This can then be shared with chairs and vice-chairs weekly.

The RSH has already said it is suspending its programme of in-depth assessments in response to the virus outbreak.

As previously reported by Social Housing – and in line with house builders’ and contractors’ strategies – cash management and liquidity positions are pivotal for finance leaders during this period.

The RSH has told Social Housing this week that it expects housing associations to be able to weather the storm when it comes to arrears, as they have bolstered their liquidity positions in advance of a potential no-deal Brexit scenario.

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