Registered Providers (RPs) are non-profit organisations that deliver, own and manage affordable housing across the UK. Increasingly, they are taking charge of private housing as well.

Unlike traditional developers, they take a long term approach to projects – not only developing them but also acting as future landlords. They can help developers find grant funding for affordable housing and help with the planning process.

Mash Halai, head of affordable housing at John Rowan & Partners, and Gareth Turner, regional development manager at A2Dominion Group, highlight five top tips for developers who want to foster a successful relationship.

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1. Understand the basic planning need for affordable housing

For any developer looking to include affordable housing on their development, it is important to understand the basic drivers for RPs.

The tenancy objectives will be key, and developers must be clear on whether the development will be for supported housing, housing for the elderly, general needs, key worker or black and minority ethnic (BME) housing.

Demonstrating that the affordable housing element is not only required but that the rental income is comparable to the local affordable market and private rental levels is equally important. Finally you’ll need to have a clear idea what the current supply and demand is for the designated area.

2. Consider the regulations you’ll need to meet

Unlike private housing, affordable homes need to be built to government-set energy efficiency levels, have minimum space requirements and have the flexibility to house people of any age or disability.

The funding for a social housing grant depends on successfully addressing requirements (and many more, as outlined below). Without these, the RP will not qualify for grant funding and this will destroy the value developers might expect from providing affordable housing.

With the current scarcity of subsidies, optimising a scheme’s performance against these indicators will be key. Relationships between the different standards can be a minefield and taking advice on tried and tested solutions will save you time and money. Below are some examples:

• Design & Quality 2007 (formerly Scheme Development Standards)
• Housing Quality Indicators (HQI’s)
• Building for Life (BfL)
• LifeTimes Homes (LTH)
• Secured by Design (SBD)
• Building Regulations +10%
• Code for Sustainable Homes (CSH) Level 3 minimum for 08/11 bid round – Level 4 thereafter
• 20% renewable energy on site
• The Mayor of London’s Draft Design Guide for London

3. Involve the RP from the start

With a their experience in the issues surrounding affordable housing, it makes sense to involve RPs from the start of a project. By bringing an RP in at a projects conception it means they can be a positive influence on the planning process, as they can help to facilitate negotiations with planners and local authority housing teams.

The longer their involvement in a scheme, the more likely it is to get grant funding, as RPs are in a position to build up strong relationships with funders on the scheme. Alternatively you may find the RP well placed to help fund the development. For example A2Dominion is currently to raise six funds worth a total of £1bn to invest in building up to 6,000 private rented homes, in partnership with Savills.

4. Understand how to work with the public sector

While many RPs act commercially they differ from private sector developers in many ways. Understanding these nuances is key to a successful relationship.

For instance, the way that RPs gain funding from the Homes and Communities Agency (HCA) is linked to a very specific set of criteria. This might include the requirements of funding milestones being reached and funds being released at stages such as the signing of the contracts, work starting on site and its practical completion.

Questions that the RP will therefore need to be able to answer are:

• What units are required and what is the need in the local area for family housing, sheltered accommodation or single person flats?
• What are the housing management considerations, common areas to be created and mix of units?
• How will community consultation be undertaken, communication with all stakeholders maintained and progress reported on?
• What will the decision making timescales be and the stakeholder’s responsibilities?
• Will there be a flexible approach to design changes and late decisions?
• Will detailed handover information and labelled keys be left?
• Are zero defects guaranteed?

5. Use RP advice to improve your scheme

The archaic perception is that introducing an affordable housing element to a scheme is a necessary evil to secure planning that often drains profit.

Nowadays this simply isn’t the case, and many private developers rely on the affordable housing sector to act as the foundations for their business. By investing in affordable housing units and delivering a quality product – and an environment where residents want to live – there’s a real opportunity to increase the sale price of private units.

Our advice is invest in innovation and design upfront in order to maximise the regeneration taking place to the area; bringing the local housing market up as well as your bottom line.  This is key to maintaining the building construction industry in lean times.

RPs have their own sales risk in shared ownership schemes and by getting advice on access, core separation and amenities means that you are less likely to get issues from the affordable parts of a development – which will only help to improve value.

The benefits of this approach are clear. Not only will planning departments look more favourably upon you, but the lessons learned will pay off as affordable housing requirements becomes mandatory for the private housing developments of the future.

• Q&A: How can I attract registered providers to my development? (part 1)
• Q&A: How can I attract registered providers to my development? (part 2)
• Healey: “Unskilled” councils hinder housing
• Birmingham uses council land to raise £4.7m from HCA
• Five tips to… kickstart your development