Policy could kill housing association development “stone dead”, warns influential consultant Greg Campbell 

The government needs to make up the funding shortfall in order to prevent a significant hit to housing development from the proposed introduction of a 5% rent rise cap, key figures in the industry have said. 

Greg Campbell from consultant Campbell Tickell told Housing Today that the rent rise limit, announced yesterday, could “kill new development stone dead”. 

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Greg Campbell of consultant Campbell Tickell

Campbell said some organisations may find it “difficult to survive”. He added: “The government needs to recognise money needs to come from elsewhere in order to maintain some kind of new supply programme.” 

Ensuring housing associations had the money to develop was now even more “serious still because of the recognition for the need to decarbonise, where the sums are fairly eye watering.” Savills have suggested the cost of building a home could go up by £10,000 more over the next five years, mainly because of the need for units to comply with increasing stringent energy efficiency standards. 

He also pointed out landlords now have high costs protecting their properties against fires.

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Peabody’s Ian McDermott

Ian McDermott, chief executive of housing association Peabody, agreed:  “From a landlord perspective, not-for-profit associations and councils already have the lowest rents and a range of competing and escalating investment challenges to navigate. We are dependent on rental income to keep investing in homes and places, and the costs of repairs and maintenance are escalating.” 

He believed “the government recognises this”, which he hoped would lead to “greater certainty and investment in socially rented homes in the future”.

Geeta Nanda OBE, chair of the G15 and chief executive of MTVH, also said yesterday G15 are looking  at ways of “getting the balance right”, of protecting residents against unaffordable rent bills and ensuring homes and housing repairs are delivered.  

Social landlords will lose nearly £7bn in rents over the next five years if the government goes ahead with the 5% rent cap, a government impact assessment has estimated.