George Grant, CEO of Housing Technology, interviewed Mark Henderson, the departing chief executive of Home Group, on leading one of the UK’s largest housing providers through crises, cultural transformation and house-building programmes.
George Grant: You’re retiring after 18 years as chief executive of Home Group. What has changed during that time?
Mark Henderson: Well, everything has changed, yet nothing has changed! What hasn’t changed is that we still have a housing crisis and we still haven’t fixed its root cause of not building enough homes. We also haven’t fully recognised that there are different housing crises across the country; in general terms, there’s a shortage of numbers in the south and the wrong homes in the wrong places in parts of the north.
What has changed is the emphasis. We’ve always been responsible for keeping people safe in their homes but there’s now much greater public attention on that responsibility and on the need for strong governance. Housing is a complicated business, particularly when care and support are added. It must be well run, well governed, well managed, safe, compliant and good value for money.
Events such as the Grenfell Tower fire were absolutely shocking and understandably triggered legislative, political and policy responses. The additional spotlight has forced housing providers to look very carefully at how they run and manage themselves.
How many homes has Home Group built during your tenure?
We’ve averaged about 1,200 homes per year, so that’s around 20,000 during the past 18 years.
We could have built more but we would have been operating at the limit of our resources and taking on more risk. One of Home Group’s strengths is its resilience, as a result of which we’ve successfully got through housing crises, the pandemic and housing booms. Overall, we have tended to be ‘small-c’ conservative.
I think the nature of risk has changed. 18 years ago, you only needed to consider one-off, individual scenarios, such as “what if XYZ happens?”. Now everything can happen at the same time, and if an organisation is pushed too close to the edge, several simultaneous events have the potential to create significant risk.
Does Home Group ever reach a ‘steady state’?
No, we’ve never reached a ‘steady state’ in terms of our operations and to some extent, we’ve deliberately designed it that way. For example, 18 years ago I had an office but I got rid of it quite quickly and now I don’t even have a desk. People once sat in the same seats, in the same rows, with photographs on their desks, whereas now they might sit somewhere different each day, work from home or come into the office.
That can frustrate people who value a personal desk but that mobility has been incredibly valuable. One of our Newcastle-based housing teams might sit beside the finance team one day and the asset team the next day. That creates far more mixing across the organisation. Businesses need to be aware, agile and accepting of constant change. Personally, I like it because it keeps things fresh.
Is that a cultural shift rather than just a change in working arrangements?
It’s definitely a cultural shift. We didn’t mandate the culture we wanted; instead, we asked everyone, “what is today’s culture and what sort of culture do you want in future?”
Their answers gave us the route map, with people telling us what they disliked and describing the organisation they wanted instead. I then had the privilege of watching that new culture develop.
Of the numerous housing ministers in post during your time at Home Group, did any meet their house-building targets?
Not many with a specific numerical pledge because delivery is so complicated. It’s very easy to announce a target but actually raising funding, finding land, securing planning permission and then building them creates a minimum cycle of three- or four-years. A parliamentary term lasts five years so even an announcement made on day one might only begin to bear fruit when the government is seeking re-election.
During my time at Home Group, the parliamentary life of a housing minister has been around one year. They’ve generally been earnest and had good intentions but housing competes with the NHS, defence, welfare, the wider economy and so many other priorities.
Housing is also very inter-dependent – a housing minister needs the Treasury, the DWP, local government and numerous funding bodies aligned. However, when a housing minister genuinely understands housing, wants to act and remains in post, it can make a real difference.
Are you leaving Home Group in a better state than you found it?
Well, I would certainly like to think so. Then again, I’m sure that in a year or so, people will find things and wonder what on earth I was doing, but overall, I hope it is in a good place.
Do you have a successor?
Yes, Helen Meehan was appointed to succeed me and is now Home Group’s chief executive and also the first woman to lead the organisation. She joined Home Group in 2015 as director of risk and assurance, became director of finance in 2018 and was appointed chief financial officer in 2022.
Helen’s progression to becoming chief executive really matters. People told us that they wanted to be able to build careers at Home Group so we deliberately invested in developing them, so someone rising through the organisation to become chief executive shows that this isn’t just something that the senior management talks about but actually happens.
What took you into social housing in the first place?
There has always been something in me that has been interested in social housing although I didn’t recognise it at the time. I liked geography, architecture, design, economics, communities and the way places come together. Before Home Group, I ran my own business, and before that I was with the One North East regional development agency.
I certainly didn’t decide at 18 to work in housing. Too few people do and that may become a challenge for the future.
Do large housing providers have to actually build houses?
Absolutely yes – if you don’t build then you have to question the purpose of receiving ‘CPI plus one per cent’ because that additional capacity is partly intended to support investment in building.
A long-term government rent agreement sets how much rents can increase each year, linked to the CPI (consumer price index) plus one per cent. That consistency gives housing providers something defensible when talking to customers about their rents and, crucially, enables sensible long-term business planning.
If you broadly know what your revenues will look like several years ahead, you can plan your investments accordingly. Combined with effective regulation and the reasonable expectation that the government would be reluctant to let a major social housing provider collapse, that certainty helps housing providers borrow at more attractive rates and supports their ability to build.
If housing providers, banks, developers and public bodies came together, what would enable them to build more homes?
The first question is whether a housing provider must own every home directly. Ownership protects customers, tenure, public investment, quality and service but if another mechanism protected those same things, the requirement for direct ownership becomes less absolute, potentially releasing significant equity held in housing stock.
What is Home Group’s asset value?
It depends on how you measure it, but a mid-point valuation would be an MVSTT (market value subject to tenancy) of some £5.2 billion and we have around £1 billion of debt, so that would mean we could realise about £2 billion of asset value. If one multiplies that across the 20 largest housing providers, the scale becomes very significant.
Could that equity be released while preserving standards and customer protection?
That’s the challenge – who buys and how do you guarantee service quality, ethics and customer protection? Conventional private-sector yields might be insufficient but local government pension schemes might accept a slightly lower yield in return for public good, so that could generate capital.
You then come to the question of how you spend that capital efficiently. If you announce £10 billion of purchasing power, land prices will rise.
I think the answer lies in partnerships. Local councils could contribute land and planning expertise, housing developers could do the building, with housing providers guaranteeing the purchases and managing the affordable homes. That idea is complicated but there’s nothing specifically preventing it today – the difficulty would be raising the necessary debwt and finding investors who understand the market and its yields.
What is technology’s role within Home Group and social housing?
We still operate with fragmented systems. Every housing provider’s data sits in too many places instead of being a genuine single source of the truth. In my experience, housing providers tend to solve individual parts rather than the whole problem.
Imagine our sector procuring collectively on behalf of seven million homes. With 55,000 homes, Home Group has a decent amount of influence but nothing like the combined purchasing power of the entire sector.
It would be wonderful to press a button and have, for example, one complete asset database and one complete customer database, speaking perfectly to each other. We are some way from that – no single product solves the entire problem and building such a product alone would be too specialised even for a large organisation.
Collective purchasing power might make it possible but persuading every technology leader to put their organisational interests aside would be extremely difficult, although strategic government intervention and genuine incentives could make a significant difference.
With the latest technologies, is there as much risk as opportunity?
Yes, and the chance of getting things wrong is also much greater. We’re all still learning how to use new technologies and the necessary skills are still developing. The opportunities are considerable but housing providers need to approach their deployment intelligently and responsibly.
What does investors’ concern about inclusion and gender equality reveal about an organisation?
It has genuinely surprised and also encouraged me that investors have paid attention to those concerns. They cared about inclusion and diversity as part of ESG, and if an organisation can answer those questions properly, it demonstrates that it cares.
This goes much deeper than comparative pay rates. It tells you whether the organisation wants to do a good job in an ethical and responsible way, and that is incredibly important to me.
Are you relieved, sad or pleased to have reached the end of your time at Home Group?
I’ve really not had time to think about it. After Home Group’s board recruited my successor, I imagined there would be six months in which things would wind down but instead it has been non-stop. Ask me again in a few weeks after I’ve left!
And finally, will you be having a leaving party?
Yes, but nothing grand! I’ll probably have a pint or two with friends at the pub around the corner from our offices – that’ll do me nicely.
George Grant is the CEO, publisher and co-founder of Housing Technology, and Mark Henderson is the departing chief executive of Home Group.
