ADRIAN WAITE says people voted for Brexit as a protest about poorer communities being marginalised, but he says this will be made worse by the UK’s departure from the European Union.
There is a housing crisis in all parts of Britain. A cross-party review has concluded that Britain needs three million more social homes by 2040. Housing associations are expected to deliver most of these and to do this they need to be able to borrow money on favourable terms and generate surpluses. However, their ability to provide affordable homes will be badly hit by Brexit. Problems include:
• Increased interest rates and lower credit ratings making loans more difficult to obtain and more expensive. Credit rating agencies have warned that a no-deal Brexit would lead to the downgrading of the credit ratings of about half the housing associations in Britain. Many housing associations are borrowing extensively in advance of Brexit to mitigate the risk of not being able to borrow afterwards.
• Increased prices especially for construction, repairs and maintenance, squeezing profit margins and making development more expensive. The construction industry depends on imported components and labour. The UK imports £10 billion of construction materials a year and 20% of
construction workers are from outside the UK. A falling pound, tariffs and other barriers and the ending of free movement will create shortages and increase prices.
• Reduced property values that will squeeze profit margins but will not make buying houses more affordable because of higher interest rates. Optivo Housing Association, for example, has told Inside Housing magazine that they have tested a scenario where property values fell by 35% resulting in a 25% reduction in the number of new homes developed.
Many people voted for Brexit because they wanted to protest about poorer communities being marginalised – including not having enough affordable homes. However, Brexit will make it more difficult for housing associations to provide the affordable homes that are needed.
Adrian Waite, Appleby-in-Westmorland
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