Inside Housing – News – Disrepair scandals ‘real risk’ to investment, says housing association boss
Disrepair scandals are a “real risk” in terms of investors, a housing association boss has said.
The panel at an NHF Housing Finance Conference session on the impact of a stagnating economy on housing associations
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Speaking during a session on the impact of a “stagnating economy” on landlords at the National Housing Federation’s (NHF) Finance Conference in Liverpool, Paul Edwards, chief executive of CHP, spoke after the Financial Times (FT) ran a piece on Peabody covering disrepair and other issues.
Asked by the panel chair whether the scandals in the sector about quality of homes and services will make a difference in how the sector is seen by investors, Mr Edwards said it represents a “real risk”.
He said: “I think we’ve been patting ourselves on the back for years for being the good guys.
“And the initial steps to access funding on ESG [environmental, social and governance] routes has been really good.”
But he said Wednesday – when the FT piece was published – was the “first time in [his] working life” that the FT had turned the lens on a housing association in this way.
“That really speaks to investors,” Mr Edwards said.
He added that housing associations have a “great story to tell”.
“We’ve all got one or two problem homes that we have to deal with, but on the whole we provide brilliant accommodation well short of market [rent] levels for people that need it.
“Upping our storytelling on that – certainly with our current and future politicians – will help to address that balance and get us back to being the good guys in the room,” Mr Edwards explained.
Matthew Bailes, chief executive of Paradigm, said investors are “definitely” interested in social and environmental issues.
But he added that he was more worried about the political reaction in terms of “big decisions” ahead on the housing downturn, the rent settlement and a revised Decent Homes Standard.
“In the long run we need 10 [to] 15 years stability and for rents in some way to pay for the zero carbon agenda,” Mr Bailes stated.
Henrietta Podd, director at risk management firm Chatham Financial, said disrepair scandals are more damaging in terms of investors when they “come as a big shock”.
“Perhaps for some of the overseas investors where maybe a senior executive in an insurance company reads something in the FT and hasn’t been briefed by the fund managers about what’s going on to the sector.
“It comes back to communication and how important that is,” she explained.
But Ms Podd said she does not think that issues around disrepair will shake support for the sector.
She added: “I don’t think there’s any sign that what seems to be this whole string of issues that are coming out in the media about quality is going to shake institutional support for the sector.
“Obviously if there is something really catastrophic, disastrous, then certainly investors will think twice.
“The closest we get to that is when there’s a governance issue and quality comes down.
“Certainly some lenders and a number of investors will certainly not go near people who’ve got at G3 [grading for governance from the regulator].”
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