Market Perspective 12/11

The ‘Housing Crisis’ is currently one of the most common phrases used to describe a housing market with the lowest levels of house-building since the 1920s, declining home ownership and ever increasing housing  waiting-lists. The need for Affordable and Social Housing is greater than ever and the need for investment has never been more critical. This is especially apparent with reducing Government subsidy and Registered Social Providers (RSPs – Housing Associations and Local Authorities) struggling to raise their traditional finance to fund current and future house-building.

Also, Developers now face generally poor market conditions with low sales rates and elusive financing for construction and individual purchasers, rendering the cross subsidy viability model broken without increased Government subsidy.

It is estimated that the private sector will soon overtake the stock of Social Housing and by 2021 the majority of households in London will be rented. This rapid growth of the weakly regulated private renting sector will increase the proportion of lower quality homes reflecting a decrease in home ownership. As individuals move towards having a lower stake in their local area growing dissatisfaction in housing and community standards will result.

The C4H model utilises RSP managed rentals from the newly built private sector to cross subsidise neighbouring social rented homes and local social enterprise. The combination of RSP involvement, recognised standards of private and social renting and additional social enterprise, partially mitigates the likely levels of frustration that are expected to increase within city communities.