Countries Largest Housing Associations Are In Trouble

[Wad]

Have also noticed a lot of London HA property being sold at auction recently, which one presumes means that they are in trouble and having to raise cash.

Correct me if I me if I am wrong but I have never understood the finances of HAs. My view is they charge low rents that do not cover the financing or maintenence costs. I was told that the housing boom allowed them to cover the deficit by periodically selling of houses to local developers and throwing out the tenants. The 'profit' and 'cashflow' from the sales covered the deficit and kept the HAs in business. They also get some subsidised loans from central Govt as I understand it.

Now the housing market is falling the deficit cannot be covered by sales of property so they are in deep financial trouble. I happen to know they also are having increasing numbers of rent arrears which is not helping as their typical tenant is more likely to be on benefits, heavily indebted, low waged and or in a insecure job.

Am I wrong? Does anyone know how the HA financing model works?

Edited October 19, 2008 by Wad

[OzzMosiz]

You were fired for making a suggestion?

Can you blame folk for working cushy numbers in the public sector if merely suggesting something in the private sector gets you fired?

What industry were you working in? Token Ring does offer some advantages over Ethernet in some network environments.

I think the point was the cost of fibre over CAT5 RJ45s, in an environment I presume to be mainly desktops????

[Flat Bear]

I do not understand the ownership and accountability of Housing Associations. They are not really part of the public sector, although they use our money to operate. But who owns them, sets them up, decides whether they are doing a good/bad job? This is one of those areas where public interest is not encouraged.

I am as bemused as you. Why such big organisations for in effect letting properties?

[dubsie]

They are regulated but if you do some digging at their annual reports you will see some are showing shocking falls in profits. Some are making less than £10,000 per year on 2 million + turn over. These are figures from 2008 and I can imagine many of these will be well into negative numbers by April 2009.

Their business models simply don't add up. What they get from rent in comparison to what they have to spend running them amounts to an unviable business.

[piece of paper]

I do not understand the ownership and accountability of Housing Associations. They are not really part of the public sector, although they use our money to operate. But who owns them, sets them up, decides whether they are doing a good/bad job? This is one of those areas where public interest is not encouraged.

They get grants from the Housing Corporation.

They spend this on plush offices and expensive chauffeur-driven limousines.

The directors' secretaries are naked under their fur coats.

Any money left over is spent on meetings.

p-o-p

[hilltop]

They get grants from the Housing Corporation.

They spend this on plush offices and expensive chauffeur-driven limousines.

The directors' secretaries are naked under their fur coats.

Any money left over is spent on meetings.

p-o-p

Where do I join?

[house man]

what a load of rubbish some people speek about housing associations we transferd to a housing assoc 5 years ago and never looked back we now have new kitchens bathrooms and lots more thamn could ever be done by councils

it has a board with a majority of tenants who get basic expenses only it is also highly regulated with regular inspections from the audit comission the fact is councils are unable to manage housing so ha,s fill the gap rents are controled by goverment and the houses CANNOT BE SOLD ON THE OPEN MARKET without housing corperation permississon and then only in very excecptional circumstances such as a proven lack of need in a area so please get your facts right

[Dangerous Woman]

They get grants from the Housing Corporation.

They spend this on plush offices and expensive chauffeur-driven limousines.

The directors' secretaries are naked under their fur coats.

Any money left over is spent on meetings.

p-o-p

The point about meetings is accurate; I once spent four hours at a HA meeting where nothing of any real importance was discussed. However, they are tightly regulated. When my practice was working for a HA building flats we had to fill in monthly cost reports and if any overspend reached a percentage (I think 10%) of the total build cost, the job was called in and audited by the Housing Corporation and you were shot in the face.

[council dweller]

what a load of rubbish some people speek about housing associations we transferd to a housing assoc 5 years ago and never looked back we now have new kitchens bathrooms and lots more thamn could ever be done by councils

it has a board with a majority of tenants who get basic expenses only it is also highly regulated with regular inspections from the audit comission the fact is councils are unable to manage housing so ha,s fill the gap rents are controled by goverment and the houses CANNOT BE SOLD ON THE OPEN MARKET without housing corperation permississon and then only in very excecptional circumstances such as a proven lack of need in a area so please get your facts right

Wecome to this site house man.

Point by point though.

I also have a new kitchen and bathroom, an awful lot of updating has been carried out to reach the 'decent homes standard.' Councils use rent money to pay for this but HA's borrow and pay around high st. interest rates. You will be paying for many years, I won't. What are the 'lots more' of which you speak?

Please let us know the income of your HAs exective officers. If you don't know I can look it up for you. Salaries usually run at between 100,000 and 300,000. Tenant board members are consulted but are only allowed to act in the interest of the HA, even if this is not in the interest of tenants (under companies law) Tenants do not run HAs, you have been conned into believing this.

The priorty of HAs in to pay interest and the principle on their massive loans. Obviously as many of them are in financial trouble (as you may have noticed, the historic debt bubble has burst, banks have been nationalised, we are on the edge of a global financial disaster etc.) so obviously HAs will have to sell properties to pay debt. HAs are putting properties up for auction. (sorry, no link)

The Housing Corporation no longer exists.

HAs have a business model that relies on easy borrowing and house price inflation, as does btl. Can you see the problem with this? Did you see the item on C4 news in which The National Housing Federation (the HA umbrella body) asked for a bailout as the banks are no longer able to provide funding?

Councils have managed to run council houses for over 100 years but some now prefer to sell them off and wash their hands of the responsiblity of housing people.

My rent for a semi-bungallow (two bed) with a large garden (afluent area) is 68 Pounds per week. A friend of mine who lives in a smaller HA home pays 86. My rent is capped by the government at 3% for the next two years. I prefer a lower rent because it comes out of my own pocket, not HB.

You are obviously happy with your housing association place, I wouldn't be, partly because I have no wish to keep bankers in clover.

I hope this helps. Please feel free to come back with more 'facts.'

[house man]

Wecome to this site house man.

Point by point though.

I also have a new kitchen and bathroom, an awful lot of updating has been carried out to reach the 'decent homes standard.' Councils use rent money to pay for this but HA's borrow and pay around high st. interest rates. You will be paying for many years, I won't. What are the 'lots more' of which you speak?

houseman: ha,s are not borrrowing at high street rates the highest rate at the moment for ha,s is around 2%which reflects how secure the sector is

my home apart from the new kitchen and bath room has had a shower insulation new doors windows a new central heating system garden fence and a gate hard wired smoke detectors security lighting plus preventative maintaince rather than reactive under the old council

Please let us know the income of your HAs exective officers. If you don't know I can look it up for you.

Salaries usually run at between 100,000 and 300,000. Tenant board members are consulted but are only allowed to act in the interest of the HA, even if this is not in the interest of tenants (under companies law) Tenants do not run HAs, you have been conned into believing this.

houseman the chief exec is on £86,000 and the two other execs are on £64,000 which inculdes their proformance related bonus about the same as

housing officers with the council however the council needed 8 people to do the same jobs. the saleries are reviewed each year by the board and if they don,t proform they don,t get the bonus as the board has 12 members all unpaid six of which are tenants i would say tenants do run the ha and have a lot more input that they ever did under the council it is true they have to act in the interest of the company but as the stakeholders are the tenants and the company is not for profit i fail to see that the interest of tenants cannot be put first and there is no way i have been conned

The priorty of HAs in to pay interest and the principle on their massive loans. Obviously as many of them are in financial trouble (as you may have noticed, the historic debt bubble has burst, banks have been nationalised, we are on the edge of a global financial disaster etc.) so obviously HAs will have to sell properties to pay debt. HAs are putting properties up for auction. (sorry, no link)

houseman:no the priorty of the ha is to provide decent affordable rented housing for people in need the few ha,s that are in difficulties used the sale of

houses or shared ownership on developments to pay for the houses for rent the hsc would not allow rented properties to be sold to pay off debts the houses put up for auction were probably these unsold cross subsidy houses which local councils won,t allow to be converted to rent

The Housing Corporation no longer exists.

houseman:The Housing Corporation was replaced on december the 1st this year by the tsa and hca both will give tenents more say than ever before

The Housing Corporation will contiue to operate winding down untill the summer

HAs have a business model that relies on easy borrowing and house price inflation, as does btl. Can you see the problem with this? Did you see the item on C4 news in which The National Housing Federation (the HA umbrella body) asked for a bailout as the banks are no longer able to provide funding?

houseman:no not quite right The National Housing Federation asked for assurances that IF the banks were unable to lend that the goverment would LEND not bailout the ha,s money to continue to develop much needed houses when a ha buys a house in a lsvt it pays between £4000 and £20000

per property which means it has a large amount of capital which can be borrowed against in most cases up to about 50% of the value of the stock

which is highly regulated by means of a rsr to the hca and the lender each year

Councils have managed to run council houses for over 100 years but some now prefer to sell them off and wash their hands of the responsiblity of housing people.

houseman:if councils have done such a grat job where is all the mony gone from the sale of council houses? in my area the council sold seven and a half thousand of the 12,000 house they owned with not a penny reinvested in housing however they do by law still have responsiblity of housing people

by maintaining the housing register also in my council now has more staff in it housing dept than it did when it owned the houses

My rent for a semi-bungallow (two bed) with a large garden (afluent area) is 68 Pounds per week. A friend of mine who lives in a smaller HA home pays 86. My rent is capped by the government at 3% for the next two years. I prefer a lower rent because it comes out of my own pocket, not HB.

houseman:by rent for a 3 bed house to eco standard level 4 and a large garden is £74 pounds a week and is also goverment controlled plus with rent convergence rent between councils and ha,s will remain the same in the future my rent also come out of my own pocket but now goes on my property and not to centrel govt and general revenue account to help keep council tax low

You are obviously happy with your housing association place, I wouldn't be, partly because I have no wish to keep bankers in clover.

houseman:yes i am very happy as are 97% of the tenants by independant survey compared to only 47% when we were council tenants as to bankers in clover bankers councillers not much differance god know theres room for both but ha,s and councils have good and bad

I hope this helps. Please feel free to come back with more 'facts.'

i also hope this helps

houseman

[argent]

Funny i had a letter from mine today. It stated that due to funding secured on the property you may see a person walking around taking pictures do not be alarmed. They may also call on your home at some point and ask to have a look around if that's ok with you.

Are they in trouble revaluing stock? or is it a usual practise?

This may be outdated now, but near Blackburn Capita wanted to build an 'academy' - they put in a bit and get the land in 25 years, the council put in £20 or £25 million, that sort of thing. They had to pretend the 1900 ish housing was unfit so they sent office junior 'surveyors' to get any, real or imagined, reason to condemn the houses. If you live in an old house, in an area which someone micht have an eye on, I'd suggest you take it seriously - google for froups who have been in this sort of thing.

[council dweller]

House man, please don't insert comments within other posters text. Sounds like posts, it makes it very difficult to read.

So the Chief executive gets 86,000 a year! I wonder what he does for that!? Please let us know the name of the HA as it's pretty easy the check on what kind of HA it is.

Sounds like your house was is in a primitive state a few years ago and has now been brought into the 21st century, don't make the mistake of putting this down to your HA. Hardwired smoke detectors and carbon monoxide detectors (which I also have) are more to do with health and safety, not out of the kindness of the HA. You were told that if there was no transfer, there would be no money for repairs but this is usually a lie and as many tenants have found, if they vote 'no' to transfer, improvements are still carried out. You don't feel that you've been conned.

HA's are supposedly 'not for profit' but are able to sell bonds which provide a yield (a profit). Also they provide massive profits for banks. I'm afraid we're living in a world of lies.

Who says councils have done a great job? Councils usually run poorly or very poorly, the point is that social housing should be run to provide housing without having to provide a profit for anyone. Aren't there enough areas already for private capital? (I will post a link to an article in the Telegraph in which it says that 'HAs are still a good sector to invest in'...if I can find it)

Edited December 19, 2008 by council dweller

[council dweller]

Sorry computer glitch.

No time to write more now, please write again house man, please let me know how far the date for rent convergence has been put back...I think it's 2020 or 2025. These things keep changing.

Please let me know the name of the council that has more housing staff after transfer than before. We can use this in our anti transfer campaign.

.......and 47% of council tenants are happy....97% of HA tenants are happy!!! Churchill said that "the only statistics I trust are the ones I fabricate myself." Or you can pay for an independant survey.

CD.

[house man]

Sorry computer glitch.

No time to write more now, please write again house man, please let me know how far the date for rent convergence has been put back...I think it's 2020 or 2025. These things keep changing.

Please let me know the name of the council that has more housing staff after transfer than before. We can use this in our anti transfer campaign.

.......and 47% of council tenants are happy....97% of HA tenants are happy!!! Churchill said that "the only statistics I trust are the ones I fabricate myself." Or you can pay for an independant survey.

CD.

hi council dweller

in answer to your questions the ceo in fact now does the job that it took 3 council officers to do in the past all on a simlar salary to what he is recivng now so i would say that is good vfm and yes my house was very bad which was why i became a housing activist 15 years ago i don,t intend to name my assocation but the audit commission awarded it 2 stars and promising which is about the highest a new organization can expect on its first inspection

i also won,t name the council but if you do a bit of digging there are articles on the web as fo your question about ha,s issung bonds yes some larger ha,s do use bonds to raise capitol but thse are not the same as stock or share bonds as they only pay interest and not a dividend so its the same as borrowing from a bank and tsa regulations any profits must be ploughed back in to housing also question do you not think that councils borrow money from banks? at least we agree that social housing should be run to provide housing without having to provide a profit for anyone and that is what ha,s do please don,t belive the propaganda put out by some anti transfer groups phone a housing assoc and ask to go in for a chat with the resident involvment officer and ask to be put it touch with residents then at least listen to both sides of the story re your question of rent convergence no it has not been put back it is still due to be compleated in 2011 i think you may be confusing this with decent homes which some councils have asked to be put back because they won,t meet the deadline , the survey i refer towas carried out by a council appointed company to ensure that satisfaction level were kept to but it has now become a bit embarissing for them

also for argent it nothingis

to worry about all housing assoc have to value their stock for the regulartory stastical return which they have to provide to the hca and the funders each year generally around 20% of the housing stock is independantly valued each year this is to ensure that ha,s don,t over value their stock

ps you may want to see what the head of housing at norwich city is up to some thing that would never be allowed by the hca sceduele 1 rules

Edited December 19, 2008 by house man

[council dweller]

hi council dweller

in answer to your questions the ceo in fact now does the job that it took 3 council officers to do in the past all on a simlar salary to what he is recivng now so i would say that is good vfm and yes my house was very bad which was why i became a housing activist 15 years ago i don,t intend to name my assocation but the audit commission awarded it 2 stars and promising which is about the highest a new organization can expect on its first inspection

i also won,t name the council but if you do a bit of digging there are articles on the web as fo your question about ha,s issung bonds yes some larger ha,s do use bonds to raise capitol but thse are not the same as stock or share bonds as they only pay interest and not a dividend so its the same as borrowing from a bank and tsa regulations any profits must be ploughed back in to housing also question do you not think that councils borrow money from banks? at least we agree that social housing should be run to provide housing without having to provide a profit for anyone and that is what ha,s do please don,t belive the propaganda put out by some anti transfer groups phone a housing assoc and ask to go in for a chat with the resident involvment officer and ask to be put it touch with residents then at least listen to both sides of the story re your question of rent convergence no it has not been put back it is still due to be compleated in 2011 i think you may be confusing this with decent homes which some councils have asked to be put back because they won,t meet the deadline , the survey i refer towas carried out by a council appointed company to ensure that satisfaction level were kept to but it has now become a bit embarissing for them

also for argent it nothingis

to worry about all housing assoc have to value their stock for the regulartory stastical return which they have to provide to the hca and the funders each year generally around 20% of the housing stock is independantly valued each year this is to ensure that ha,s don,t over value their stock

ps you may want to see what the head of housing at norwich city is up to some thing that would never be allowed by the hca sceduele 1 rules

you might be interested in this

http://www.cipfa.org.uk/publicfinance/news...m?News_id=59222

It appears that rent convergence will be much later than you think!

[council dweller]

Hello again house man

Sounds like you were very much in favour of transfer !! Did you play an active role in trying to convince tenants that transfer would be in their interest? Our local council is spending 1.06 million on it's transfer attempt and tenants are being barraged with a flood of propaganda including two DVDs. Unfortunately, those us who are against transfer only have a fraction of the money they (donations from tenants) but we should be able to get our case across and should be able to win the ballot. Perhaps, tenants in your area were were not especially active? How many leaflets did they manage to get out? All the signs are that tenants will vote against transfer here fortunately.

Strangely, none of the bumf sent to us mentions the fact that a new HA would start off with a debt (to buy our homes etc) of about 60million. These are the kind of 'facts' that tenants need to be told, is it not so?

There are very strict limits on councils borrowing, this is actually given by the council as a reason for transfer.....it's as if debt is a good and wonderful thing!

Okay House man, please let us know if you have a vested interest in HAs, you obviously have some close knowledge of your HA.and some (rather patchy!) knowledge of HAs generally. Btw, I have spoken to a board member of an HA and was told a pack of lies about how many houses that had supplied and how they were a small, cozy independant organisation. (they are part of a large, heavily indebted regional group!)

As for contacting an HA and asking to speak to a tenant! Don't make me laugh!!

Let's clarify...you are saying that HAs are not dividend paying and that that means that they are non-profit making?

I admit that my knowledge on housing issues is patchy too, maybe we can help each other to become better informed, even if none the wiser!