Tuesday, September 23, 2008

“Two housing associations are likely go bust in the next 12 months”

The CEO of the multi-billion pound Housing Finance Corporation (not the Housing Corporation as I first misread the piece) Piers Williamson, predicts that two housing association will completely fold “Ujima style” . While there will be a number of “failing associations” which will be merged into larger groups.

Most of the recent failures have been about daft development – over development in a good market. Here we have an abysmal market ......,

So, if he is right, the current market failure will be to blame, unlike Ujima which was down to good old fashioned senior management megalomania.

Associations who have gambled on rising property prices to fund mixed developments are going to find themselves in trouble. Others (hopefully the vast majority) should be OK if they scale back development. Not good news for the Labour Government housing targets.

Nor is it good news if you rent from or work at one of these failing associations. Neither for local communities who depend upon associations not only for social housing but also providing other services.

The government is going to have to think again about its housing policy and its dependency upon cross subsidy from private development. As well as the emphasis on shared ownership rather than homes for rent. This is the time for those who have been concerned that in housing, the tail has been wagging the dog.

We need some more of that “clear red water” that UNISON General Secretary Dave Prentis, mentioned today at conference.

Tomorrow is my UNISON Housing Association branch executive meeting. I’ll see what people think.Check out Inside Housing who are having a run of scoops recently. May we live in interesting times?

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