18 Why leasehold management is a growing issue Like councils before them, housing associations have over the past 10 years added substantial numbers of leasehold stock to their portfolios, both through shared ownership and outright sale, as they have sought to bring in income to replace the grant reductions from central government. Housing associations will be doing this even more in the next 10 years as they seek to meet the needs of those who cannot buy homes or pay market rents. The arrival of Right to Buy within the housing association sector, the continued demand for Right to Buy in the local authority sector and the disposal of more local authority stock means a growing proportion of social housing providers’ stock will be leasehold. This leasehold stock will have to be managed efficiently, such that it generates a surplus for investment in housing. This requires a long-term management strategy for the stock, with careful attention being paid to sinking funds, stock rationalisation, planned maintenance and keeping an asset register under constant review. Because of the changes in legislation and Government policy, flexible tenure stock is the future of many housing association and other social landlords and they will have to seek development funding from other sources. One of these sources could be surplus generated from the successful management of the leasehold properties in their stock. Better and more efficient leasehold management by social landlords should lead to more funds being available to house people in housing need. It will also lead to better and more efficient management of rented stock as lessons are learned and quality thresholds rise. Social landlords need to ensure best use of their assets. Housing associations, in particular, need to look carefully at how and why they should retain elements of their stock. Successful leasehold management will be a key factor in the future sustainability of any multi-tenure social housing provider. In a flexible-tenure future, if the management of leasehold properties does not generate a surplus, this will mean the rented stock will be effectively subsidising the leaseholders. Our Working Group at The Housing Forum came together with the aim of highlighting the challenges of leasehold management and to offer our collective experience and advice to social landlords to help them develop a strategy to manage leasehold properties efficiently. Thus, the aims of this chapter are: l To help social landlords think more laterally about leasehold management and its potential for their housing stock. l To understand that successful leasehold management is not easy. It has a constantly evolving set of parameters: legal, contractual, standards, energy and cost. Social landlords need practical advice on how best to develop a strategy for successful leasehold management. l To highlight some ideas, some problems and some evidence of good practice to help social landlords develop a successful leasehold management strategy.
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