CREDIT CRUNCH HITS HOUSING ASSOCIATIONS
Programme : PM
Station : BBC RADIO 4
Date : 05/05/08
Time : 17:15
Duration : 08 MINUTES 55 SECONDS
CAROLYN QUINN: Presenter
The credit crunch isn’t only hitting the private housing market it’s also having a huge impact on the rented sector with housing associations unable to fund new developments. Last summer the Government unveiled plans for a big increase in the number of new homes to be built each year. But developers are cutting back their building plans and the number of new homes completed this year is likely to fall. At the same time the Local Government Association is predicting that because of the credit crunch and the economic slowdown two million households in England - that’s five million people – will be on the waiting list for social housing by 2010. Our business correspondent, Nils Blythe, has been finding out more.
NILS BLYTHE: Business Correspondent
I’ve come to the Market Estate in North London. It’s a big redevelopment where the old council flats are being torn down and replaced with a new housing association development where people can rent or buy. About one in seven properties in Britain belongs to a housing association these days. I’m joined by a local resident, David Kelly [phonetic spelling]. David, what’s this going to be like when it’s all finished?
DAVID KELLY: Local Resident
What will happen will be an old sixties red brick, large council estate is being converted into traditional street properties, so people are being re-housed from what was really quite terrible conditions that had been neglected over many years.
NILS BLYTHE:
So what is the current problem for housing associations?
DAVID KELLY:
When people talk about the credit crunch the popular perception is of… of people not being able to meet their mortgages. What is also happening is in social housing the credit crunch has had an effect. The housing associations need money to make these new developments, to build the new homes, and whenever the money market contracts and there’s less money around there’s less money to build new homes.
NILS BLYTHE:
The Market Estate is run by the Southern Housing Group and its chief executive, Tom Dacy, says that since the credit crunch began last summer it’s becoming increasingly difficult for housing associations to borrow money for new developments.
TOM DACY: Chief Executive, Southern Housing Group
Lenders don’t have the finance themselves. Funds are in short supply and not all associations will be able to access funds
NILS BLYTHE:
Have some of the lenders simply stopped lending to housing associations altogether?
TOM DACY:
Some have stopped taking on new business, that… that’s certainly correct. There aren’t many major lenders in our sector, there are only seven major lenders in the sector and five of the seven aren’t taking on new business.
Programme : PM
Station : BBC RADIO 4
Date : 05/05/08
Time : 17:15
Duration : 08 MINUTES 55 SECONDS
CAROLYN QUINN: Presenter
The credit crunch isn’t only hitting the private housing market it’s also having a huge impact on the rented sector with housing associations unable to fund new developments. Last summer the Government unveiled plans for a big increase in the number of new homes to be built each year. But developers are cutting back their building plans and the number of new homes completed this year is likely to fall. At the same time the Local Government Association is predicting that because of the credit crunch and the economic slowdown two million households in England - that’s five million people – will be on the waiting list for social housing by 2010. Our business correspondent, Nils Blythe, has been finding out more.
NILS BLYTHE: Business Correspondent
I’ve come to the Market Estate in North London. It’s a big redevelopment where the old council flats are being torn down and replaced with a new housing association development where people can rent or buy. About one in seven properties in Britain belongs to a housing association these days. I’m joined by a local resident, David Kelly [phonetic spelling]. David, what’s this going to be like when it’s all finished?
DAVID KELLY: Local Resident
What will happen will be an old sixties red brick, large council estate is being converted into traditional street properties, so people are being re-housed from what was really quite terrible conditions that had been neglected over many years.
NILS BLYTHE:
So what is the current problem for housing associations?
DAVID KELLY:
When people talk about the credit crunch the popular perception is of… of people not being able to meet their mortgages. What is also happening is in social housing the credit crunch has had an effect. The housing associations need money to make these new developments, to build the new homes, and whenever the money market contracts and there’s less money around there’s less money to build new homes.
NILS BLYTHE:
The Market Estate is run by the Southern Housing Group and its chief executive, Tom Dacy, says that since the credit crunch began last summer it’s becoming increasingly difficult for housing associations to borrow money for new developments.
TOM DACY: Chief Executive, Southern Housing Group
Lenders don’t have the finance themselves. Funds are in short supply and not all associations will be able to access funds
NILS BLYTHE:
Have some of the lenders simply stopped lending to housing associations altogether?
TOM DACY:
Some have stopped taking on new business, that… that’s certainly correct. There aren’t many major lenders in our sector, there are only seven major lenders in the sector and five of the seven aren’t taking on new business.
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