1. COMMERCIALISATION IN HOUSING WELCOME Commercialisation in Housing Organised by:Sponsored by:

2. COMMERCIALISATION IN HOUSING Opening remarks from the Chair Stuart Macdonald Editor, Inside Housing Commercialisation in Housing Organised by:Sponsored by:

3. COMMERCIALISATION IN HOUSING Matthew Bailes Director of Regulation Homes and Communities Agency Commercialisation in Housing Organised by:Sponsored by:

4. Organised by:Sponsored by: Commercialisation in Housing  Financial strength of the Sector  A changing market – future risks  What is the regulator’s interest?  What do we want to see? Perspective of the social housing regulator

5. Organised by:Sponsored by: Commercialisation in Housing

6. Organised by:Sponsored by: Commercialisation in Housing Balance Sheet

7. Organised by:Sponsored by: Commercialisation in Housing  Second sector risk profile published September 2013  Welfare reform  Diversification within the sector –of activities –of business structures –for profit entrants –commercialisation of traditional sector  Rents post 2015  Sales and development risks Sector risks

8. Organised by:Sponsored by: Commercialisation in Housing  We are the social housing regulator  It is not our job to tell independent providers what to do, or what not to do  It is our job to protect tenants and taxpayers, and help support the supply of social housing.  We will do this by protecting the social housing assets  Therefore our interest lies in the relationship between social housing and non-social housing activity. Diverse activities – the regulator’s interest

9. Organised by:Sponsored by: Commercialisation in Housing  Compliance with our economic standards  Limited recourse to social housing assets. This might, for example, mean holding the assets off-balance sheet, and securing debt on assets held for commercial activities not social homes.  Board level grip on opportunities and risks, with sensitivity analysis  Appropriate pricing of risk  Structure in line with charitable vires, with commercial activity to x-subsidise charitable objects, not the other way round What do we want to see?

10. Organised by:Sponsored by: Commercialisation in Housing  Strong response to discussion document  Sector and its lenders get the problem…. ...but providers in particular concerned about ring-fencing  Our response? –No change in determination to protect assets –Always our view that risk is inevitable if new homes are to be built. Issue is the potential level of recourse to the assets –Need for providers to understand level of recourse. –Stress-testing of businesses to ensure they can withstand the most serious challenges  Conversation continues over the Autumn Future development of the regulatory framework

11. COMMERCIALISATION IN HOUSING Afzal Ismail Executive Director Service Matters (Orbit Group) Commercialisation in Housing Organised by:Sponsored by: Julian Beaney Business Services Director

12. Organised by:Sponsored by: Commercialisation in Housing

13. Organised by:Sponsored by: Commercialisation in Housing

14. Organised by:Sponsored by: Commercialisation in Housing

15. Organised by:Sponsored by: Commercialisation in Housing

16. Organised by:Sponsored by: Commercialisation in Housing

17. Organised by:Sponsored by: Commercialisation in Housing

18. Organised by:Sponsored by: Commercialisation in Housing

19. Organised by:Sponsored by: Commercialisation in Housing

20. Organised by:Sponsored by: Commercialisation in Housing

21. Organised by:Sponsored by: Commercialisation in Housing

22. COMMERCIALISATION IN HOUSING Victoria Jardine Partner Anthony Collins Solicitors Commercialisation In Housing Organised by:Sponsored by:

23. Organised by:Sponsored by: Commercialisation in Housing RPs: between a rock and a hard place Regulatory success: social housing assets are protected Commercial success: make lots of money “Safe” middle ground: identify and manage risks of commercial activities to achieve an appropriate return whilst ensuring social housing assets are not put at risk

24. Organised by:Sponsored by: Commercialisation in Housing Regulatory / charity law position on diversification “Primary purpose” Investment Trading (for profit): Low / no risk Tax implications (for a charity)

25. Organised by:Sponsored by: Commercialisation in Housing Managing risk Deliver outside the RP? Funding/ers Procurement Governance Intra-group support Deliver outside the Group? Joint venturing / cost sharing On/off balance sheet New sources of external funding

26. Organised by:Sponsored by: Commercialisation in Housing Back to basics: strategic questions What is your motivation? What is your market? What are the resourcing requirements? What are your challenges?

27. Organised by:Sponsored by: Commercialisation in Housing Plan for success as well as failure How do you measure it? What are the key indicators? What are the risks of failure and success? What do you do when you get there?

28. Organised by:Sponsored by: Commercialisation in Housing Getting off to the right start Executive team “ownership” Board engaged, informed and supportive Appropriate(ly robust) external advice Corporate structure aligned key resources designated Implementation plan in place Contingency planning done Rigorous and risk-focussed ongoing monitoring Exit strategy agreed

29. COMMERCIALISATION IN HOUSING QUESTIONS & ANSWERS Commercialisation In Housing Organised by:Sponsored by:

30. COMMERCIALISATION IN HOUSING Closing remarks from the Chair Stuart Macdonald Editor, Inside Housing Commercialisation in Housing Organised by:Sponsored by:

31. COMMERCIALISATION IN HOUSING THANKYOU Commercialisation in Housing Organised by:Sponsored by: the webinar is now closed