Field of Dreams – Creating opportunities to help LA’s increase housing supply

7 January 2019

It is four years since ARK Consultancy undertook research for the GLA into creating opportunities for helping local authorities increase housing supply, At the time there was plenty of appetite for development, a willingness to take risk and a range of creative initiatives in place to make it happen.

Since then, uncertainty has increased and the ability to access decent affordable housing, even for those on reasonable incomes, has decreased – creating further divisions between generations and pressure on those on middle incomes. This has pushed housing up the political agenda and resulted in various government initiatives- the latest of which is the lifting of the HRA borrowing cap.

But do more readily available funds address the problem?

ARK Consultancy have been rooted in development and regeneration and are fully supportive of the new flexibility.  However, having supported numerous social landlords we are also alert to the practicalities of development and the challenges Local Authorities face – improved access to finance may make borrowing less complex but it will not make development faster, easier or reduce the risk in a rapidly changing market.

What is not evident now and what was not in evident from our previous research is lack of funding being an inhibitor, indeed, funding was generally plentiful and cheap for those who had the appropriate borrowing vehicles in place. There were some spectacular results, even with the HRA cap in place.

For successfully developing LAs the key determinants were political will, land availability, leadership, risk appetite and the appropriate skill set rather than finance.

Even with increased funding LAs will inevitably struggle to secure opportunities in the highly competitive open market for land, so their primary focus for development will inevitably be on land in their ownership. This may bring viability advantages but there are procedural and consultation requirements that will constrain pace.

Development and regeneration ambitions and opportunities therefore need to be considered in the round, using the appropriate skills to optimise the assets already owned. For Local Authorities strategic asset management and development or regeneration should be inextricably linked within a cohesive development strategy.

The motivation for development or regeneration is also important – is it to improve poor estates, increase housing supply generally or add significant additional affordable homes? Homes need be in the right place of the right type and available at the right price,

We welcome all supply side initiatives, however, the notion that there is a “broken housing market” where increasing supply can create equilibrium is misguided. The market is not broken, it is merely reacting as the housing market does. It is impossible for LAs to increase numbers sufficiently in the right place, at the right time and in the right numbers to improve accessibility/affordability – this can only ever be achieved with some form of subsidy.

We applaud the lifting of the HRA cap (albeit we await the detail) and the opportunity should be grasped, however, we should not lose sight of the fact that further interventions will be required to put housing within the reach of those who have been marginalised

To misquote Kevin Costner “build it and they will come.” To which we would add – but can they afford it?

News & Insights

Read the latest housing sector news, blogs, and commentary from ARK.

View more

Stopwatch with EPC Certificates in the background. The stopwatch says 2030

EPC C by 2030: The Clock is Ticking

By Luke Beard ·

The UK government has set a major challenge: all social housing must have an EPC rating of C or above …

Arsenal's Emirates Stadium with the We Can Kick It charity logo

ARK Assistant Director Paul O’Callaghan’s 40-Mile Charity Walk for We Can Kick It

By Pete Evans ·

ARK proudly supports Paul O’Callaghan’s 40-mile walk for We Can Kick It, raising funds for children battling cancer through football …

Professional consultants looking at a computer

Helping Housing Associations Navigate Strategic Risks in 2025

By Helen Scurr ·

This article discusses the key risks facing housing associations in 2025, as revealed by Inside Housing’s 2025 Risk Register survey. …

Subscribe

Subscribe to our newsletters for the latest industry insights

Our newsletters and reports will keep you updated on topical issues from the sector as well as what’s happening at ARK.

Subscribe today