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The perfect storm

Orbit Group’s Chief Executive Paul Tennant looks at the findings of the UK Housing Review, launched today and outlines what it means for the housing sector and our customers.

The 2015 Housing Review indicates that in many ways the housing sector may face a 'perfect storm' as Welfare Reform, Right to Buy and growing issues of affordability collide to place increasing pressure on our customers, communities and business models. It is Impossible to predict with any degree of accuracy how exactly his will play out over the coming year, but it is clear that the new operating environment is going to be more challenging for us all.

Our duty then is to ensure we do everything we can to understand those challenges, manage their implications and derive opportunities where we can find them.

The housing sector has shown itself highly adept at evolving to up its game and the recent statistics showing we delivered more than 130,000 affordable homes since 2011 during a period of declining public subsidy is just one example illustrating our capacity to do more with less. At the same time, we have worked with the construction industry to keep things ticking over during a period when developer house building shrank

There is no doubt that housing organisations have raised their game and have plans to build more homes. Orbit, for example, delivered over 2400 homes in the last two years and will exceed 3000 homes in the next two years almost doubling our annual production of new homes. Yet importantly we and others have also refined and enhanced community investment programmes to target support to people and their communities.

The new wave of welfare reforms are a significant concern as Government seeks £12 billion of savings. Whichever policy the government takes, it will pose further challenges for the housing sector and our customers. A personal and particular concern for me are the unacceptable levels of child poverty we are seeing in our country today.

So now we need to step up yet again. The gap between the number of homes we need and the number of new homes we build is stark and to keep pace with household growth, England needs to build 220,000 homes per year. Crucially, as we leverage our assets and seek to extract maximum value from the dwindling subsidy there is, we must also place more emphasis on supporting need and aspiration in the communities where we work. That is why this year Orbit will be focusing on research and influence around affordability, and specifically Government support for tackling fuel poverty which we know is a growing issue for so many of our customers. We also need to help our customers move onto the next step in their lives, improve their skills and move into jobs. Helping people to move away from the benefits system will be a big priority and is the only real way to address growing concerns around affordability.

We need to find new models of delivery, forge stronger strategic partnerships and also build better local and regional networks with Government, health and other agencies focused around common cause and joint investment. Good quality housing is fundamental in any thriving community, so partnerships and open dialogue going forward will be ever more vital. It's a tall order. But adversity is a well-known catalyst for innovation and amid the challenge there is genuine opportunity to re-calibrate our offer around the localism and devolution agenda to do more - or at least as much - with less. The choice is stark. Sit back and wait. Or shape the future we wish to see.