Savills has partnered with Housing 2017 and Social Housing magazine to undertake the definitive annual study into the state of the country’s housing sector.
The findings of the survey will be launched at Housing 2017 in Manchester next week.
We spoke with Lucian Cook, residential research director at Savills, for a sneak preview of some of the survey results
Q: What questions did you set out to answer with the survey?
A key question was ‘how can housing associations deliver their social purpose of providing homes for households priced out of the market, while increasing the numbers of homes they build to help tackle the housing crisis in many areas?’
For many, the answer is that they need to cross-subsidise from market sale or private rental properties. But to do this well, housing providers need to ensure they mitigate the risk of increased exposure to the housing market.
Q: What are some of the key challenges?
We have become very used to a low interest rate environment, but at some point interest rates will go up. Also, in the short term, we have quite a degree of political and economic uncertainty, which is likely to act as a drag on house price growth.
So housing providers won’t be able to rely on house price growth to bail them out if they get into any difficulties.
Q: How did the survey suggest they mitigate risks?
One important element here is that housing associations have to become more savvy about the planning system and have a more flexible and longer-term approach around strategic land (i.e. land which has yet to secure planning permission).
Q: How will this help?
We are beginning to get a picture that strategic land isn’t something of which housing associations have significant reserves.
If housing providers are buying oven-ready land at full development value, then they are more exposed to risk.
Buying strategic land at lower cost means lower risk as housing associations have greater flexibility around the mix of tenures they build on a site.
Q: Isn’t buying land without planning permission a risk too, though? What if planning permission is refused, or comes with unexpected planning requirements?
Buying strategic land allows you also to control the development process. The risk around the development land is whether you can get planning permission and bring that to fruition.
But what we know from the Housing White Paper is that there is likely to be more opportunity.
We are beginning to see the National Planning Policy Framework resulting in more consents being granted and there will be pressure on local authorities to grant more consents as they objectively assess their need and then are much more closely held to account on meeting that need.
For full analysis of how housing providers access land and how much they hold, the households they want to house, and the number one issue that would help secure housing association housebuilding, look out for the full Savills Housing Sector Survey 2017 next week.
Findings will be presented at 10.30am on Tuesday 27 June in the Exchange Auditorium at Housing 2017 in Manchester Central.