Sustainable Leasehold and Asset Management

With leasehold stock levels rising, housing associations and other social landlords face a new and critical challenge. Do they continue to own and manage all their existing stock for the foreseeable future, or instead do they take the radical step of analysing what could be released and disposed of?

It is to help answer this and related questions that The Housing Forum produced this guide. The guide has been prepared by the Making the Most of Existing Housing Working Group, which met throughout the year, and draws on numerous conversations, members’ insights and experiences and a membership survey into leasehold practices and issues.

We focused our attention on two main areas: ensuring best value from existing homes; and assessing how leasehold management can be good business.

It is axiomatic that we need to ensure best use of our assets. Housing associations need to look carefully at how and why they retain stock. They need to ask themselves whether retaining stock on a permanent basis is the right approach for today and tomorrow.

We noted that the gradual introduction of Right to Buy within the housing association sector, the continued demand for Right to Buy in the local authority sector and the disposal of the most valuable local authority stock will mean a growing proportion of both housing association and council stock will be leasehold.

This leasehold stock will have to be managed sustainably, such that it generates a surplus for future investment. Housing associations over the last 10 years and even more so in the next 10 years will be adding substantial amounts of leasehold stock to their portfolios, both shared ownership and outright sale.

This has been done as income/profit is needed to replace the grant reductions from central government. Better and more efficient leasehold management by social landlords will lead to more funds being available to house people in housing need.

The group discussed the difficult balance of achieving customer satisfaction while ensuring that leaseholders pay the right amount for their services. We looked at ways and means of extracting extra capital resources from our existing stock.

And we also came up with suggestions for protecting the asset base so that capital income can be generated from future sales, both in terms of value from leasehold properties and longer-term enfranchisement of the properties.

The rights and wrongs of stock disposal exercised much of our time. The issue is not about selling high- value council or housing association property; it’s about recognising that what was good for social housing 50 years ago or indeed 30 years ago may not be what is needed for residents in the future.

These are difficult issues to solve but our guide offers illumination and valuable pointers for tackling them effectively and fairly.

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