Written evidence to be reported to the House
Housing and Regeneration Bill
4:15 pm
David Orr: I think the regulator has a proper role in ensuring that providers are operating in accordance with their constitutions and objectives. On the 4,700 market-rent homes, in a market where there is a real problem for people who cannot afford to buy, but where there is not enough social rented housing, the provision of market rented housing is a proper response to the demands of the market at present and the needs that people are expressing.
Places for People probably has in excess of 50,000 homes, of which about 40,000 will be social rented. A small number in relation to that will be shared ownership and then there are the market rent properties. That kind of plurality of supply is to be welcomed. It is important that we look at the failures in the housing market and try to identify appropriate solutions.
It is not helpful if affordable social rented housing is going to people who have a bit more income but cannot afford to pay present market prices for owner-occupation. If it is possible for housing associations to use their commerciality to cross-subsidise in pursuit of their social objectives, it would be foolish to argue against it.
I will give you a specific example: the traditional housing association model would be that the Government provide a grant which, on its own, would allow a housing association to provide 20 homes for rent. It is a welcome model and something that we have been successful at doing. However, if, with the same amount of grant, the housing association can build 100 homes, sell 50 of them on the open market, use the profit not for paying dividends but for cross-subsidising against 25 houses for shared ownership, 25 for social rent, and perhaps providing some play equipment, then 100 homes have been created, rather than 20. That is five more social rented homes than would have been the case, and a contribution has been made to a mixed-tenure, mixed-income community. It seems that, if we can use that commerciality and profit-making potential for that purpose, everyone wins.