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Commercialisation in Housing

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  1. Commercialisationin Housing COMMERCIALISATION IN HOUSING Sponsored by: WELCOME Organised by:

  2. CommercialisationinHousing COMMERCIALISATION IN HOUSING Sponsored by: Openingremarks from the Chair Stuart Macdonald Editor, Inside Housing Organised by:

  3. Commercialisationin Housing COMMERCIALISATION IN HOUSING Sponsored by: Matthew Bailes Director of Regulation Homes and Communities Agency Organised by:

  4. CommercialisationinHousing Perspective of the social housing regulator • Financial strength of the Sector • A changing market – future risks • What is the regulator’s interest? • What do we want to see? Sponsored by: Organised by:

  5. Commercialisationin Housing Sponsored by: Organised by:

  6. Commercialisationin Housing Balance Sheet Sponsored by: Organised by:

  7. Commercialisationin Housing Sector risks • Second sector risk profile published September 2013 • Welfare reform • Diversification within the sector • of activities • of business structures • for profit entrants • commercialisation of traditional sector • Rents post 2015 • Sales and development risks Sponsored by: Organised by:

  8. Commercialisationin Housing Diverse activities – the regulator’s interest • We are the social housing regulator • It is not our job to tell independent providers what to do, or what not to do • It is our job to protect tenants and taxpayers, and help support the supply of social housing. • We will do this by protecting the social housing assets • Therefore our interest lies in the relationship between social housing and non-social housing activity. Sponsored by: Organised by:

  9. Commercialisationin Housing What do we want to see? • Compliance with our economic standards • Limited recourse to social housing assets. This might, for example, mean holding the assets off-balance sheet, and securing debt on assets held for commercial activities not social homes. • Board level grip on opportunities and risks, with sensitivity analysis • Appropriate pricing of risk • Structure in line with charitable vires, with commercial activity to x-subsidise charitable objects, not the other way round Sponsored by: Organised by:

  10. Commercialisationin Housing Future development of the regulatory framework • Strong response to discussion document • Sector and its lenders get the problem…. • ...but providers in particular concerned about ring-fencing • Our response? • No change in determination to protect assets • Always our view that risk is inevitable if new homes are to be built. Issue is the potential level of recourse to the assets • Need for providers to understand level of recourse. • Stress-testing of businesses to ensure they can withstand the most serious challenges • Conversation continues over the Autumn Sponsored by: Organised by:

  11. Commercialisationin Housing COMMERCIALISATION IN HOUSING Sponsored by: AfzalIsmail Executive Director Service Matters (Orbit Group) Julian Beaney Business Services Director Organised by:

  12. Commercialisationin Housing Sponsored by: Organised by:

  13. Commercialisationin Housing Sponsored by: Organised by:

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  15. Commercialisationin Housing Sponsored by: Organised by:

  16. Commercialisationin Housing Sponsored by: Organised by:

  17. Commercialisationin Housing Sponsored by: Organised by:

  18. Commercialisationin Housing Sponsored by: Organised by:

  19. Commercialisationin Housing Sponsored by: Organised by:

  20. Commercialisationin Housing Sponsored by: Organised by:

  21. Commercialisationin Housing Sponsored by: Organised by:

  22. CommercialisationInHousing COMMERCIALISATION IN HOUSING Sponsored by: Victoria Jardine Partner Anthony Collins Solicitors Organised by:

  23. Commercialisationin Housing RPs: between a rock and a hard place • Regulatory success: social housing assets are protected • Commercial success: make lots of money • “Safe” middle ground: identify and manage risks of commercial activities to achieve an appropriate return whilst ensuring social housing assets are not put at risk Sponsored by: Organised by:

  24. Commercialisationin Housing Regulatory / charity law position on diversification • “Primary purpose” • Investment • Trading (for profit): • Low / no risk • Tax implications (for a charity) Sponsored by: Organised by:

  25. Commercialisationin Housing Managing risk • Deliver outside the RP? • Funding/ers • Procurement • Governance • Intra-group support • Deliver outside the Group? • Joint venturing / cost sharing • On/off balance sheet • New sources of external funding Sponsored by: Organised by:

  26. Commercialisationin Housing Back to basics: strategic questions • What is your motivation? • What is your market? • What are the resourcing requirements? • What are your challenges? Sponsored by: Organised by:

  27. Commercialisationin Housing Plan for success as well as failure • How do you measure it? • What are the key indicators? • What are the risks of failure and success? • What do you do when you get there? Sponsored by: Organised by:

  28. Commercialisationin Housing Getting off to the right start • Executive team “ownership” • Board engaged, informed and supportive • Appropriate(ly robust) external advice • Corporate structure aligned • key resources designated • Implementation plan in place • Contingency planning done • Rigorous and risk-focussed ongoing monitoring • Exit strategy agreed Sponsored by: Organised by:

  29. CommercialisationInHousing COMMERCIALISATION IN HOUSING Sponsored by: QUESTIONS & ANSWERS Organised by:

  30. Commercialisationin Housing COMMERCIALISATION IN HOUSING Sponsored by: Closingremarks from the Chair Stuart Macdonald Editor, Inside Housing Organised by:

  31. Commercialisationin Housing COMMERCIALISATION IN HOUSING Sponsored by: THANKYOU Organised by: the webinar is now closed