Local authorities are restricted from borrowing by public sector regulations, whereas housing associations can fund themselves from banks and building societies using housing stock and rent flows as security. If councils were free to do the same, it is estimated that this funding could support the building of 100,000 council houses a year, which would meet the current shortage.
Bill Morris, general secretary of the T&G Workers' Union, said at the last TUC annual conference: "Both the T&G and the Labour Party believe strongly in the concept of citizenship. I can think of no more practical statement of citizenship than having a home, whether rented or owned."
Will housing associations, now the main providers of social housing, soon have properties for people above the council tenant bracket? A pre-election survey by Property Week and lawyers Pinsent Curtis found that housing associations are expected to fall from favour as the balance of power shifts back towards local authorities. But David Philpott, of Pinsent Curtis's Birmingham office, says: "It is our view that in the short to medium term the well-managed housing associations with sufficient reserves to do so will continue to develop at significant levels."
A consortium of social housing providers has set up a "property shop" in Sheffield, where people with low incomes or limited housing options can look for shared-ownership and low-cost housing.
Housing associations are regulated by the Housing Corporation, a government agency responsible for funding all new social housing provision in England. Although the previous government handed over much of the responsibility for social housing to housing associations, it was the Labour government of 1964-66 which created the Corporation. The idea was to build a new social housing sector to fill the gap between the shrinking private rented market and the local authority sector.
Until 1988 housing associations received 100 per cent public funding, but the 1988 Housing Act meant that a large share of costs had to be borrowed from the private sector. From then on, housing associations became the major providers of new social housing. Over 2,200 housing associations in England provide homes for around 1.5 million people. Since 1988, pounds 8.5bn in private sector funds has been invested in housing associations, either to build new homes for rent and shared-ownership or to rehabilitate existing properties.
Assured tenancies and affordable rents are the housing association's main priorities, but increasing importance is placed on low-cost home- ownership schemes. These allow a tenant to buy a share in a property on a long lease, with the option to increase the share. Rent is paid on the share owned by the housing association and the mortgage is arranged independently by the individual. Properties are sold at full market value.
The appeal is the ability to part-buy with a strictly regulated landlord. Getting a mortgage is usually simple, but to be accepted by the housing association you will have to show you can meet the mortgage and rent payments.
There are two types of shared-ownership: conventional, which operates in properties which are already owned by the housing association; and "do-it-yourself", which allows a tenant to seek a property on the open market in areas covered by the housing association, which will then buy the property with the tenant. This helps spread social housing away from traditional council estates.
Existing tenants also have access to the Tenants' Incentive Scheme, a cash grant to help buy a home in the private market. This is designed to free up places for tenants-in-waiting.
These initiatives aim to help tenants get a foothold on the housing market ladder. Another little-known scheme provides a softer landing for those about to fall off. Under Mortgage Rescue, the housing association will buy a property facing repossession and take on its debts, so residents can remain in their homes as tenants.
A recent survey from the Housing Corporation showed that most housing association tenants are pleased with the service: 82 per cent are satisfied with their association as a landlord. Some tenants can be very demanding, as North British Housing Association has reported. Repair requests include "This is to let you know our lavatory seat is broken and we cannot get BBC2" and "Will you please send someone to mend our broken path? My wife tripped and fell on it and she is now pregnant."
If central government funding is channelled in a different direction, housing associations may not remain the chief social housing providers. But, as Mr Philpott of Pinsent Curtis says: "Housing associations have proved responsive to a changing funding environment. Through structured use of available reserves, working in partnership with others in both the public and private sectors, and by diversification, have continued to thrive."
North British Housing Association has over 38,000 homes nationwide: 01772 897200. Metropolitan Home Ownership covers London: 0181-881 1234.
Local housing association information available from the Housing Corporation: 0171-393 2000, or from local councils.Reuse content