Housing associations scale up development plans despite COVID pressures

Half of housing associations plan to scale up development despite widespread fears about the UK economy, a new survey from accountancy and business advisory firm BDO has found.

BDO’s Social Housing Barometer survey found that 48% of housing associations plan to develop more homes in the next five years compared to previous commitments. This is in spite of 87% reporting a loss of confidence in the UK economy.

This sustained commitment to development is also notable given that over half (54%) said their financial surpluses had decreased over the last 12 months and just over a third (36%) reported they had lost confidence in key development partners and suppliers delivering major works.

The survey did however reveal some regional differences. Among housing associations operating in London and the South East, only 36% plan to develop more homes than past commitments, while 32% plan to reduce housing development. Among organisations in the North West or North East, 46% plan to increase development. Strikingly, no housing associations operated in the Midlands, East of England, the South West, Wales or Scotland said they planned to scale back development plans.

When questioned about their boards’ top three priorities, the respondents’ answers were very consistent with last year’s survey. Driving efficiency and innovation took the top spot (61%), while health and safety (53%) and scaling up development (50%) followed closely behind.

When it came to the top identified risks, almost three quarters (74%) of respondents identified the wider economy as one of the risk areas of greatest concern. This was followed by Government policy (64%) and health and safety (62%).

The survey results also shed light on how housing associations have adapted to the pandemic and introduced new ways of working. Two thirds (67%) said they had made IT adjustments to facilitate remote working. Almost all respondents (97%) said they had changed procedures around allocations and lettings, 80% changed procedures for responsive repairs, and over half (56%) said they had encouraged remote working for all staff.

However, the switch to remote working has not come without consequences, as 41% reported an increase in IT security related incidents.

Housing associations also appear to be keeping a closer eye on supply chain risks. Two thirds (67%) said they are monitoring the financial resilience of key suppliers and 56% have increased their collaboration and communication with key suppliers.

Phil Cliftlands, BDO’s National Head of Housing said:

“Our survey shows that housing associations have responded positively to the challenges presented by COVID-19. Some have sped up their adoption of new technologies to create a more agile workforce and embrace a more digital offer. However, the swift introduction of new procedures and processes has brought with it the risk of weakened internal controls and an increased potential for fraud, error or cyber breaches.

“While COVID-19 has temporarily paused some activity in the sector, it’s very encouraging to see so many housing associations pressing ahead with their long term development plans. That said, we may see variations in regional house prices caused by the potential exodus of home workers from London and the South East which could impact housing association development plans.

“Our survey shows that boards are being remarkably consistent in terms of their focus on long term strategic priorities and risks. However, we are beginning to see that carbon neutrality is creeping onto the agenda for the first time. Achieving net zero carbon emissions will cost many housing associations a lot of money, so we are likely to see this topic gaining more strategic attention in future.”

Further details from the survey are available in BDO’s Social Housing Barometer 2020 report which can be downloaded from the BDO website.