It was a packed day at the Social Housing Finance Conference today, with some great speakers across the board.
So many interesting topics were covered, and some of the key points included:
1. The highly-anticipated housing administration scheme is expected to arrive in June or July 2018.
2. We can expect the Regulator to “finesse” the IDA programme soon.
3. Joint ventures are rapidly becoming a mainstream activity- some of the key learning points are around governance (ensuring the JV is well run); incentivising partners (the JV model works best when partners have an equal investment); and early agreement to investment outcomes. Challenges include cultural fit; index-linked payments; and the RP’s cautious approach to maintenance and management costs.
4. Investors’ are still very keen on the market, including lots of overseas investors, but their concerns are around political risk (eg Universal Credit); market risk; poor governance; reputational risk; mergers distracting from core business; and rating downgrades.
5. There is no such thing as too much stress testing - what is your ultimate loss?
6. The value of high rise and complex buildings is likely to be lower in most cases, partly because of the likely capital expenditure needed in the near future, but also because of higher maintenance and management costs in the future.
7. The tragic events at Grenfell Tower, and its aftermath, have highlighted poor underlying construction in many buildings. Moving forwards, we should spend more time and money on quality control checks - perhaps by employing clerks of works, and/or quality based procurement.
8. Consultation has begun on a proposed new valuation basis (Market Value - Social Housing) that will sit alongside, and be an alternative to, EUV-SH and MV-T.
So, all in all a busy time in the sector as we strive to develop more homes whilst protecting our social purpose.