The UK’s small but mighty housing associations will play their part in getting Britain building again

By Jonathan Pearson, director at Residentially

I have spent many years working in social housing, yet rarely have I felt such a tension between size and speed.

Yes, the government’s ambitious commitment of delivering 1.5 million new homes in this Parliament must be applauded. But if we leave the heavy lifting to only a handful of the huge associations that dominate our sector, we risk creating a pipeline so concentrated that the slightest planning problem or delay knocks thousands of units off course.

Every year, this concentration of large housing association only intensifies. For example, Paradigm and Settle said in March they were exploring a tie-up that would create a 30,000-home landlord across the South East. At the same time, Places for People have opened merger talks with South Yorkshire Housing Association. I do not begrudge these organisations, their scale or their ambition. But when it comes to development, the logic that bigger equals better can contain a dangerous blind spot. It assumes that only the largest players build, and that everyone else is, at best, a helpful subcontractor.

That is demonstrably false. Smaller associations routinely outperform their giant cousins once completions are measured as a share of total stock, according to data collected for Inside Housing’s 50 biggest builders report last year. Coastline, with 5,000 homes, completed 191 new properties last year which is roughly four per cent of everything it owns, while Soha, at 7,000 homes, delivered 308, again north of four per cent. When you scale those ratios nationally, the contribution is anything but marginal.

Why does this matter? Because the homes most needed now are often those delivered best at modest scale. A 20-home infill on redundant land, a cluster of 35 bungalows at the edge of a village, a small block of flats within a converted office. By their nature, these schemes demand intimacy with place and an understanding of local bus routes and schools to GP surgery waiting lists. They are too fiddly for a 10,000-unit master-plan, too small to justify the overheads of a PLC contractor, but are the bread-and-butter developments for the nearly 300 associations between 1,000 and 10,000 homes that anchor our sector.

The wider prize is diversity, of geography, of typology, and of delivery model. When dozens of associations each add a few dozen homes, this creates opportunity across Cornwall and Cumbria as well as London and Manchester. We avoid the cookie-cutter developments that so often accompany huge schemes, because each project is better shaped to local needs, and we protect housebuilding against single-point failure. If one 400-home estate stalls, 40 different 40-home sites can still march on.

Yet talk to these organisations, and three barriers come up again and again. First, land. Small, irregular parcels are routinely bundled into strategic sites and sold in one lot to volume builders, shutting smaller developers out. Second, finance. Small housing associations borrow at premium margins, shouldering covenants designed for balance sheets twenty times their size. Third, an often gruelling planning process with the same level of scrutiny for 25 homes as for 2,500.

But at last there is hope that the government is listening. Only last week it announced a new National Housing Bank able to lend on keener terms. This is precisely the kind of special-purpose funding line, with a government guarantee, that could slash borrowing costs for schemes too small to interest the bond markets.

On planning too, there is hope. Until now the system asked a nine-home infill to jump through the same hoops as a 90-unit estate. From next spring, applications for up to nine homes will be decided by professional officers, not committees, and will face lighter-touch Biodiversity Net Gain requirements. A new “medium” category for 10-49 homes will also see simpler rules and a possible exemption from the post-Grenfell Building Safety Levy. In practice that means a parish-scale scheme that might once have languished for a year can be approved in weeks.

Of course, the reforms will mean little unless they are implemented with zeal. Planning officers need resources to wield their new delegated powers; Homes England must release land in parcels small enough to be usable rather than merely relabelled, and the National Housing Bank has to lend at margins that reflect the social value we create. But the direction is finally right.

I have argued for years that housing delivery should be bottom-up as well as top-down, with many baskets, and many eggs, each one tailored to its community. With these reforms the government has, at last, begun to weave that bottom-up safety net. The task for the country’s small housing associations now is to step into the space they have opened and prove that small can be mighty.