Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/523/3860

From The Socialist newspaper, 4 March 2008

Safe as houses?

Housing association collapses

MANY HOMEOWNERS face the risk of losing their home because of the effects of the credit crunch, but are housing association tenants completely insulated from the crisis? For the first time ever, an English housing association became insolvent late last year suggesting that they are not protected from the crisis.

Paul Kennedy

Ujima, a "black-led" association with around 5,000 homes, presented a winding-up petition to court saying it was unable to meet its debts as they fell due.

The banks faced a dilemma. Lending to associations was not supposed to be the "subprime" end of the market; this was supposed to be the closest thing to risk-free lending. The banks have lists of homes that they could claim back to get their money back.

However, the prospect of taking over social housing would have provoked a political storm and drawn attention to weakness in their loan books which could threaten them by undermining confidence in the markets.

The Fitch credit rating agency warns that some UK mortgage lenders are likely to have ratings downgraded because on continuing falls in prices.

In this case Ujima's 1 billion assets were handed over to the giant London and Quadrant Group, which has given no commitment to retain Ujima's black community focus.

It is not clear what would happen if a really big association runs into trouble.

Council tenants, faced with the possibility of their homes being handed over to a housing association, should take this experience as a warning when they are told about associations' ability to borrow to do repairs, or are given assurances about local accountability.

Ujima seems to have hit the rocks because of grandiose but badly managed growth plans combining with the decline in the property market and the difficulty of raising money from panicky banks.

The government's plans to increase the amount of affordable housing are based on pushing associations to borrow in order to build more. Any fall in property prices must be a risk for organisations that buy up land for future development.

Traditionally, associations have benefited from cheap borrowing rates because they were seen as safe; small wonder that the Council of Mortgage Lenders has spoken of an "upward pressure" on interest rates for associations.

It would be foolish to rule out the possibility of another collapse but, short of this, housing associations will have less to spend on repairs and services for their tenants.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 4 March 2008:

Unite for a living wage

Greenwich workers score victory against single status

Angry civil servants strike over pay


Socialist Party NHS campaign

Thousands protest at threats to hospital

Rewarded for zeal at cuts

Derby health workers


International Women's Day

Fight for a woman's right to choose


Anti-War

DEMONSTRATE

$3 trillion Iraq war

Sheffield activists fight militarism


Environment and socialism

Walthamstow 'RAPpers' against toxic incinerators


Socialist Party news and analysis

Housing association collapses

Meet Brown's new finance expert

Fans blow whistle on Game 39

Campaign to Defeat Fees

Swansea - no sign of Griffin!


International socialist news and analysis

Turkey's invasion destabilising region

Russian election

EU war with super-rich?


Workplace news and analysis

Pensions under attack

Unison witch-hunt: Members bite back

Teachers must reject real pay cuts

Greenwich workers fight attacks

Socialist Party member stands for Unite (T&G) general executive


 

Home   |   The Socialist 4 March 2008   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Housing:

triangleHeating scandal on east London estate

triangleNo to the Woolwich monster block

triangleSalford Socialist Party: Housing crisis - the socialist solution

triangleHackney Socialist Party: Slum housing in the past; and the crisis today

triangleDebate: should tower blocks form part of socialist housing policy?

Tenants:

triangleSix months on - still no justice for Grenfell

triangleTwo in five 'right to buy' homes now for let

triangleThem & us

triangleCorbyn must challenge pro-gentrification council leader or others will

Banks:

triangleThem & Us

triangleWidening wealth gap, increase in poverty...make the fat cats pay

triangleRBS to sack 1,000: nationalise the banks

Reports and campaigns

Reports and campaigns

17/1/18

Women

Socialist Party women's meeting brings together members to share experiences

17/1/18

Newham

Packed Newham meeting against academies

17/1/18

Liverpool

Lobby pushes Liverpool council to oppose privatisation

17/1/18

Barking

Heating scandal on east London estate

17/1/18

Policing

Undercover policing legal challenge

17/1/18

Woolwich

No to the Woolwich monster block

17/1/18

Union

Workplace news in brief

17/1/18

Union

PCS union 2018 elections - nominate the left slate for a continued fighting leadership

17/1/18

Hackney

Hackney school cleaners strike

17/1/18

RMT

RMT strikes against driver-only operation continue

17/1/18

Yorkshire

Ferrybridge: Workers down tools over unpaid wages

17/1/18

Cuts

We must fight all council cuts!

17/1/18

Socialist Party

Southern Socialist Party conference

16/1/18

Birmingham

Home care workers to strike

12/1/18

Waltham Forest

Outrage against 'monster block' plan

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle17 Jan Corbyn's Labour needs 100% anti-cuts strategy and fight for democracy

triangle17 Jan NHS crisis: under pressure from all angles - end cuts and sell-offs!

triangle17 Jan We must fight all council cuts!

triangle16 Jan Home care workers to strike

triangle15 Jan Carillion crisis: Demand action to save jobs and services

triangle12 Jan Outrage against 'monster block' plan

triangle12 Jan Mini-strike wave continues and intensifies

More ...

triangle23 Jan Bristol North Socialist Party: 'You can't have capitalism without racism' - was Malcolm X correct?

triangle23 Jan Cardiff West Socialist Party: How the Poll Tax was beaten

triangle24 Jan Caerphilly Socialist Party: The Carillion scandal

triangle24 Jan Cardiff Central Socialist Party: Carillion collapse - Watershed moment for public services

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

January 2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2