Battening down the hatches

In our previous report it was clear that the level of pessimism within the sector was growing and expectations for a quick and so called ‘V shaped’ recession were low. The most recent of our surveys indicates that the mood has continued to darken.

In August 2008, 81% thought economic instability would be short lived; however by early 2009 almost three quarters said they didn’t expect a recovery until the end of 2010. The forecast has now shifted further back with nine out of ten not expecting a full return to growth until around the middle of 2011.

When do you think the UK economy will recover to previous growth rates?
   












It is not just the recession playing on the minds of senior housing executives. With a General Election around the corner and a Government focused on reducing its debt, many are now starting to consider the impact of political pressure on their organisation. 

According to our survey, over three quarters of associations think social housing will remain a priority in the run up to polling day. Post General Election, however, the proportion falls to below half, indicating significant concerns about the levels of ongoing government support in the medium to long term.

Will social housing remain a priority for the current Government in the run up to the next election?














With the demand for Housing being at records levels, do you believe Social Housing will remain a priority for the Government after the election?

A growing sense of realism was also detected within responses to the specific question concerning whether HCA funding is likely to fall whilst the Government looks to reduce public sector debt. 99% of those Housing Associations questioned thought it would, reflecting a massive change in expectations. Earlier in 2009, the proportion was only 37%.

In the light of the expected public sector squeeze following the 2010 election, do you expect a reduction in HCA/Scottish government HID funding?

"This is a revealing conclusion and probably reflects concern that the sector is entering unchartered territory. Notwithstanding the overwhelmingly positive view of the short term position, 55% do not consider that social housing will remain a Government priority after the election - with anticipated public sector cuts having a significant impact. With the Government already having brought forward its social housing spending plans, perhaps we are starting to see a new found realism with organisations accepting that they have for the time being ‘had their lot’."
Gary Moreton, Baker Tilly, Head of Social Housing

As in the previous survey six months ago, respondents are still overwhelmingly in support of the HCA, with 69% of those expressing an opinion, considering it to be doing a good job. At March 2009, the jury was out, with only 51% considering that the TSA was acting effectively. The latest survey sees this figure rise to 60%. 

However, in response to the question posed to housing associations in England and Wales regarding whether they support the TSA charging for regulation from April 2010, an overwhelming 81% said they did not.