Should I stay or should I go? Lines from the famous Clash song play in my head as the EU vote draws nearer.
Every day the evidence for and against is churned out, but how people will vote relies much on who they believe in, as none of us can really say with any certainty what the impact of the UK’s exit from the EU would be.
So how are housing association risk maps looking as the sector contemplates the implications of Brexit?
From an affordable housing perspective, the decision to leave or remain is not black and white.
In many ways, housing associations are unique businesses with a traditionally counter-cyclical business model - relying on rental income rather than sales. However, as developers of new social and commercial homes, our day-to-day business is inevitably affected by the economy.
Brexit Resi Survey
It’s just two weeks to the EU referendum – take our survey on the impact of a possible Brexit on the UK residential market.
There are seven questions that should only take three minutes to complete. All responses will be anonymous and the results of the survey will appear in a forthcoming issue of Property Week.
If we exit the EU, the pound is likely to fall in value and interest rates will rise. In turn, this will make borrowing more expensive for housing associations, as well as for our customers who purchase shared-ownership or market-sale properties. Devaluation of the pound would also hike inflation, as Citibank warns, which will have a negative impact on our tenants, who pay a much greater percentage of their income on food and other basics.
Yet there is an element to Brexit that exposes disunity between the interests of the tenant and the association, because as housing associations, we operate with the knowledge that any fall in the market will lead to more opportunities for affordable and market-rent housing activities. This is an appealing prospect, but we need to look at the long-term picture.
The European Investment Bank, in the mood for support, just increased funding to the UK affordable housing sector by £1.5bn. This is an important source of cheap funding, particularly for regeneration projects, but the prospect of Brexit puts it at risk.
In total, 40 housing associations secure long-term cheap debt and are rated by Moody’s, which already stated that Brexit will throw us into a prolonged period of uncertainty and negatively affect investment.
When it comes to maintaining these sources of funding for the affordable housing sector, ratings are often based on the strength and standing of the UK government, so this will impede our ability to build new homes.
But what about the people? In London, 44% of rough sleepers are from Europe and 13% of clients using day centres are from the European Economic Area. Demand in these areas could fall if we proceed with Brexit.
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Give us your thoughts on the upcoming EU Referendum in the comments section below or by tweeting @propertyweek.
However, those from other EU member states made up only 3.7% of new social and private lettings last year, according to figures from the Department for Communities and Local Government.
In addition, when we look at work skills, the housing sector relies heavily on European labour in the construction, repairs and maintenance sector, as housing associations do in our vital care and support activities.
How will we provide the services most needed by our residents if this type of labour becomes scarce in the UK?
So, should I stay or should I go? If housing associations are to agree that the wellbeing of our existing residents is paramount, it is necessary for their sake to stay in and solve the housing crisis through less drastic measures.
Geeta Nanda is group chief executive of Thames Valley Housing