Riverside to plough £500m into decarbonisation following One Housing merger

Riverside and One Housing Group will more than double their combined spending on decarbonisation to £500m following their merger, senior figures from the organisations have said.

The two organisations, which earlier this month came together to form a 75,000-home group with One Housing as a subsidary, will prioritise investment in existing stock over development for the next few years.

Hugh Owen, director of strategy and public affairs at Riverside, and Richard Hill, chief executive of One Housing, told Housing Today that the expected £500m spend over the course of the group’s 30-year financial plan is a substantial increase- more than a doubling - on what the organisations would have spent individually.

Riverside has an initial target of getting all of its housing stock up to Energy Performance Certificate C by 2030, and then has a longer term target for net zero by 2050.

Owen said decarbonisation was the area where the ‘net gain’ through efficiencies and scale gained from the merger was most apparent, although he did stress that much of the investment will come further down the line when technological solutions are clearer.

He said: “We are not rushing, we are watching the market in terms of the more high-tech elements and we plan to take fabric-first approach, rather than rushing into heat pumps and things like that.”

“We know at the moment that the technology isn’t affordable and the pricing of it for customers isn’t such that makes heat pumps an attractive proposition”. Owen stressed however that the group would need to comply with any regulation that comes forward as the government seeks to hit a target of installing  600,000 heat pumps a year by 2028.

Owen and Hill also said building safety was a big focus in the short term and estimated that the cost of carrying out fire safety remediation works across its stock is £240m.

Both Liverpool-based Riverside and One Housing, which operates primarily in London, also have challenges around the need to regenerate existing estates. Hill said: “Quite a lot of our London-based estates will need regeneration over the next 10 to 15 years, there will be a lot of upfront investment and there are a lot of upsides fof merging us but it is a bit about being a bit more resilient financially.” Owen said Riverside’s regeneration challenges were forcused on reinvigorating “low-value northern neighbourhoods.”

The pair also said that a 40% increase in development of new homes – a key benefit of the partnership outlined by the two organisations last summer– refers to an increase in total homes built over the course of the 30-year financial plan period, rather than an immediate increase in annual output. Hill said: “Year-on-year those numbers will vary quite a lot and particularly in the early years we are going to focus on fire safety, remediation and other priorities.”

Rvierside last year built 766 homes, while One built 338, meaning the group built 1,104 homes. A 40% increase on this level of devlopment would be an extra 440 homes a year.