“The loss of EU financing will be a blow if not replaced,” says Bevan Brittan partner

By Hugo Stephens, partner at Bevan Brittan LLP

The Chartered Institute of Housing’s June annual conference was dominated by the EU referendum – with most delegates bewildered that the country voted for Brexit.

Fears were focused on financial market turbulence increasing borrowing costs … the loss of EU funding … and the risk that builders may not be able to hire the workers they need because of immigration restrictions.

However, with markets restored and borrowing costs low, Brexit appears to have made it easier to access funds, with several housing associations already seizing the opportunity to borrow at very attractive rates of interest.

Bevan Brittan has recently advised a number of housing associations on new funding – including long-term loans from local authorities – without the time and expense of going to the capital markets. We are also working with authorities wanting to put cash reserves to good use with unsecured short-term loans – making them attractive to highly geared associations.

The better financial climate is also encouraging an increasing number of joint ventures with private sector organisations to develop new housing models, including collaborations with health sector bodies.

The loss of EU financing will be a blow if not replaced. But EU money is aimed at “places” and communities – not housing per se – and has not been a substantial part of the overall UK housing budget.

It is too early to tell what system of immigration will emerge. But, given Brexiteers’ emphasis on ensuring the country admits sufficient skilled people, housebuilders and other businesses should not assume the worst.

The wisest course would seem, therefore, to “keep calm and carry on”!

However, Brexit turmoil has been superseded by political convulsions, with the Conservative Party leadership election resembling Agatha Christie’s “And Then There Were None”. Theresa May has emerged from the bloodletting mostly unscathed, and the party seems to be uniting around her.

Unfortunately, she has not taken much interest in housing to date and so there are few indicators of any policy changes. Most pertinent will be the impact of Brexit on large-scale regeneration projects that are likely to contain substantial housing elements.

For that, we need to find out the new Prime Minister’s thinking.

Housing associations hoping for a return to grant funding are probably dreaming. But Mrs May has promised to deliver a fairer more inclusive society, and the view seems to be that she will continue using Government funding to support new routes into home ownership.