Social Housing

Housing associations have two priorities relating to their stock: to update existing dwellings and to increase their portfolio share through new build.

The Government reported that in 1997 there were over two million homes that were considered below 'decent standard' and claimed that local authorities were not keeping up with required maintenance or demands of tenants. As a conclusion, the Government proposed an initiative that would bring 95% of social housing up to a minimum defined standard by the year 2010. Housing associations are now working to achieve this through tasks such as heating upgrades (or installation of central heating where there was none previously), improvements in kitchen and bathroom facilities and ensuring the home is warm and weatherproof. The latter may involve increasing the amount of insulation to meet targets set by the local authority or housing association to tie in with their own environmental policies.

The landlord is likely to have a team of maintenance workers that will carry out minor repairs but will almost certainly be looking to sub-contract work for major improvements. Depending on the scope of the work this might be outsourced to trades people or given to a full service construction company that can address all the areas of work that the association or the local authority requires.

In addition to repairing and upgrading existing stock, the Government has set a target of 240,000 new homes to be built each year up to 2016 in order that supply meets the three million mark by 2020. At its annual conference in autumn last year the National Housing Federation claimed that this target was in jeopardy due to the effects of the credit crunch and the associated slow down in the construction industry. Some experts have predicted that just 100,000 new homes will be produced this year way below the Government's target and this is, they say, unlikely to rise above 160,000 a year over the longer term, leaving a massive short fall. Social housing providers are expected to meet about one third of the target but as funds and resources decline, this seems unlikely. Already, the National Housing Federation is predicting that more than 200,000 households will be added to waiting lists by the year 2011, some made homeless due to job losses and home repossessions, others simply because of the factors of increasing demand and lack of stock.

In uncertain economic times housing associations are feeling the pinch as much as other business and commercial organisations but there is evidence to show that they are weathering the storm better than the private sector. Funds have been secured through the Government's three-year investment programme into affordable homes; some housing associations have been able to reduce operating costs through mergers; and others have set up partnerships with the private sector to buy up partially built or 'ready to sell' new properties, thus increasing their portfolio at the same time as allowing the construction company to move stock in a slow market.

The outlook for the construction company is one peppered with opportunities but beset with challenges! Every housing association is looking for the best available deal and is likely to push its suppliers hard through competitive tendering. In such a market it will be the leanest and best managed construction companies who are the winners.