Inflation has risen beyond expectations for the third consecutive month, with Britain’s inflation rate hitting 2.5% in June. Sector finance leaders will not only be considering the implications of any fiscal response on their borrowing and investment, but what this means for their customers’ finances following a year when almost one quarter of tenants went into arrears.
Within an ever-changing and complex environment, sector finance leaders came together at our Finance Leadership Forum last month to hear from experts and thought leaders, and discuss the factors impacting their world now. Today we’re sharing the top five talking points from the event.
A balancing act
Competing priorities were a challenge before the coronavirus crisis hit, with leaders already grappling with the challenges of decarbonisation, building safety and new supply. Gloria Yang, Deputy Chief Executive at Origin Housing, spoke about their approach to finding balance in this context. Gloria talked about the importance of collaboration and innovation, including balancing investment needs, identifying efficiencies, and retaining talent.
The zero-carbon challenge
The zero-carbon challenge featured heavily throughout the event. Unsurprising, given the estimated £104 billion price tag to decarbonise existing social housing stock – the equivalent of five years’ rent. With concerns about how this can be achieved and where the money will come from, questions were raised around what funding streams can be tapped into to make this goal possible. The first step is ensuring you have an accurate picture of your existing assets to identify the level of investment needed through efficiencies, funding streams or revenue generation. Does your organisation have this information in place? The Office for Budget Responsibility’s Fiscal Risks Report 2021 published this month estimates that delayed action could double the contribution to public sector debt by 2050-51, showing that landlords should be taking action now.
The importance of ESG is on the rise
We were joined by Sarah Forster, Chief Executive at the Good Economy and Catherine Raynsford, Director of Stakeholder and Investor Relations at the Hyde Group, to talk about their approach to environmental, social and governance (ESG) reporting. Catherine described how by aligning what they measure to what matters to them as an organisation, they can see if their interests align with potential partners. Stonewater has also recently published their own sustainable finance framework including a range of carbon targets. Attendees commented that it had prompted them to consider their own KPIs – what does your ESG reporting framework look like?
A ‘moment of change’ in the policy environment
Savills’ Board Director, Head of Affordable Housing, Helen Collins described the policy environment as a ‘moment of change not seen for 30 years’. An increased reliance on debt and the change in relationship with lenders against the backdrop of a key government agenda of new supply, the changes to tenant/landlord relationship triggered by the Social Housing White Paper and strategic stock investment choices, mean that we are entering a new phase of complexity.
Sector resilience
As we emerge from the pandemic, social housing is strong and resilient compared with other sectors. In her closing comments, Housemark Associate Director, Amanda Leonard stressed the sector’s responsibility to optimise its capacity and understand the impact of strategic decision making. How does your organisation use insights to go beyond how you are performing and see what could be possible?
Our Leadership Forums provide relevant insights, practices and policy updates to help shape your strategic thinking. All speakers at our Finance Leadership Forum were rated ‘excellent’ and all attendees rated the event at least 8 out of 10. You can see the full agenda from the day here.
To find out more about this event series, or how to access insight, analysis and services that give you greater confidence to make decisions that make a difference with Housemark, contact emily.cullingham@housemark.co.uk.