Paul Hackett tells Housing Today Live: London conference this is the 鈥渢oughest time鈥� for housing association finances he can remember
The chief executive of Southern Housing has said the housing association鈥檚 halt to new development beyond its committed programme will last until its cash interest cover has improved.
Speaking at Housing Today Live: London in Westminster this morning, Paul Hackett said that, in his 35 years working in the sector, this was the 鈥渢oughest time鈥� for housing association finances since the introduction of mixed funding in 1988.
鈥淐apacity has been depleted by four years of rent cuts and a cap at below inflation last year,鈥� he said, explaining that Southern had increased repair and maintenance spending by 31% over the past two years.
He said this increased spending pressure, combined with the background funding constraints, had 鈥渋mpacted our capacity for new development鈥�.
鈥淲e鈥檒l build out our 3,700-home contractually committed new build programme but we won鈥檛 start any additional homes until our EBITDA-MRI cash interest cover has recovered towards the end of this parliament,鈥� he said.
鈥淭his is not where we want to be. But something has to give, and for the time being that鈥檚 new development.鈥�
Hackettsaid the government had 鈥渁 huge challenge鈥� to address in social housing, saying that 鈥渙n every level the system needs reform鈥�.
He welcomed the news that the government was considering giving registered providers a 10-year CPI+1% rent settlement, which he said would 鈥渕ake a huge difference鈥�, but said the reintroduction of rent convergence would be 鈥渇airer鈥� while helping to build housing associations鈥� capacity over the long term.
Hackett also praised the National Housing Federation for identifying other levers that government could pull to increase affordable housing delivery, which includes the extension of the 好色先生TV Safety Fund to social and affordable rented homes, an increase in the unit grant rate and duration of the Social Housing Decarbonisation Fund and Affordable Homes Programme and providing loan guarantees.
Hackett鈥檚 comments come as concern mounts in the social housing sector about interest cover being at historically low levels. Interest cover compares earnings to interest payments and is used as a measure of registered providers鈥� financial capacity
In February the Regulator of Social Housing warned that
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