Paul Hackett, Chief Executive, explains how Southern Housing’s Board resolved to increase investment in existing homes over the development of new homes.

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Written by

Paul Hackett CBE

Chief Executive at Southern Housing

This week (6 May) Southern Housing’s Board agreed to an historic increase in investment in existing homes. We merged in December 2022, and that year we invested £204m in repairs and maintenance. This year, we’ve increased the budget to £268m and the Board have approved a long-term financial plan that will see a huge boost to investment in existing homes over the next 30 years:

• £2.2 billion in day-to-day repairs
• £2.21 billion on planned maintenance
• £4.78 billion on major repairs
• £9.2 billion overall on repairs and maintenance.

I’ve worked in housing for 35 years and I can honestly say that this is the toughest time economically for housing associations and councils that I’ve ever seen. Rents were cut by 1% per year for four years from 2016 and capped at below inflation last year. At the same time, we’ve seen a big increase in borrowing costs and inflation. This is putting huge pressure on housing association finances.

It’s therefore essential that we prioritise and make tough choices. As a result, the Board has resolved to build far fewer new homes over the next few years as we use our financial capacity to increase investment in existing homes. Whilst we’ll continue to build contractually committed developments, we won’t make any fresh newbuild commitments. It breaks my heart to say that, because 140,000 children will sleep in temporary accommodation tonight and more than 1.2 million households are on council waiting lists.

Millions more social and affordable homes are needed, but we must make tough choices, and the Board’s priority is to invest in the homes we already own and manage. And we’ve set a budget and a long-term financial plan that does just that.

What I would say though, is that it’s impossible to do everything at once. There simply isn’t the contractor capacity or the skilled workers to complete this investment overnight. We’ll be running multi-year investment programmes to ensure good value for money. In the meantime, we’ve increased our responsive repairs budget to ensure homes are well maintained. We’re also changing how we deliver responsive repairs. From June, Axis will replace United Living and Wates in London. And from the autumn, our in-house repairs team will take over the United Living repairs contracts outside London, with call handling in all these areas in-sourced to help improve our communications. These changes along with big increases in investment will result in improved services for residents.