2019 review of social housing

Suresh Lal, Partner and Head of our Social Housing Practice discusses some of 2019’s key developments in the social housing sector and explains what they mean for senior talent demands in 2020

2019 has seen geographical differences in the housing sector’s talent demands. Throughout the year the northern regions of the UK have continued their development programmes, and in some cases, they have increased their remit. However, London and the southern counties have shifted their priorities and the support required for their housing teams.

Across the UK, the year began with a strong focus on building development pipelines. The interim management demand centred around finance and development talent, from executives through to project staff who could support and execute the plans for the construction of more housing.

The pipelines of the London and the southern counties however, have been particularly affected by market prices and lower returns on investment in recently acquired land, especially in the market sale space. Even with more stable land prices in the North, throughout the country organisations have been erring on the side of caution as the UK economy still wavers from the precarious Brexit deadlines. Factoring in that the number of unsold housing association market sale properties has increased by 59%, the continued drop in the housing market is perhaps one of the catalysts as to why the interim talent and skills demand has deviated from development work for the southern half of the country.

We saw a pivot point that came in June, where housing associations increasingly focused on the improvement of their existing property portfolios. This may have stemmed from the government consultation report, ‘Building a safer future: proposals for reform of the building safety regulatory system’. The public consultation feedback is still to be reviewed and published, but the paper did reinforce the need to revise asset management with a particular requirement to enhance fire, health and safety measures. This has led to the second half of the year seeing a rise in work around upgrading the living experience of tenants, both in their health and safety but also in the services offered by the housing associations. The improvement process has been paired with a renewed spotlight on digital customer service. Digital strategies to offer more effective communication between tenant and landlord has been a trend that emerged last year, but it is clear that it has been an ongoing shift with many teams still in need of additional senior talent and an influx of skills to continue the transformation work.

Housing associations also invested in training for health and safety, governance and compliance knowledge. Boards are aware that these issues have to be placed high on the agenda in the coming year, but we are already seeing a competitive demand for highly experienced health and safety and asset management talent to inform and advise social housing associations in their endeavours. In particular, we have seen the rise of senior executive level interims and consultancy-based work to set in place rigorous plans to achieve more within the stringent regulatory standards set.

This year has also seen Boards starting to look at talent pools differently. There is increasing appetite for the progression of executives into chief executive roles. Something that is also being recognised but needs to be considered more seriously is diversity. The stats released by Inside Housing earlier this year have shown that there has been little improvement on previous years. More questions are starting to be asked of how housing associations, and us as talent partners, can impact diversity in the sector. Clear change must be high on the agenda for 2020.

The recently announced outcome of the UK general election with the conservative majority is set to give some clarity to the future of the industry and the 2020 housing landscape. Housing associations have been greatly impacted by a stream of housing ministers and secretaries that have taken on the role over the past nine years of conservative party leadership, but there is hope that the majority will establish stability as it opens opportunity for policies that have been stagnant from the political uncertainty to come back into play. The industry is looking to move forward with a clear housing strategy in place and one that features housing associations at the heart of the community and place shaping.

I am looking to 2020 with a distinct interest in the changes for the construction industry. From a regulatory standpoint, we are expecting profound sustainability requirements for new homes set on a local and national level. There also certainly seems to be more noise around partnering with modern methods of construction (MMC) firms, including the uptake of modular housing construction, and how that will affect the current housing crisis. I predict this coming year we will see substantial changes within the construction industry with new methods and standards being implemented. We already have conversations with teams looking for interims to lead or work in their MMC factories and this could give rise to further work of this kind.

The impending off-pay role working legislation that is set to be in place for the private sector from April 2020, may change the landscape regarding the interim talent available in the housing industry. However, despite this potential hinderance to the talent pool, I envisage the year ahead will see a distinct need for interim management to support the rise in asset management issues that are bound to come from a revised ‘Decent Homes 2’ standards and the high-profile fire risk rectifications that we have seen since the tragedy of Grenfell. The teams we are currently engaged with are ramping up their demand for additional staff and skills to purposefully manage these challenges.

Our Housing Practice is looking forward to being there with them on their journey and support them all in 2020 and beyond.

For more information please contact Suresh Lal.