For the first time in decades the numbers of properties in the private rented sector exceed those in the social rented sector in England. Commentators have declared the end of public-sector housing and regeneration has fallen offthe agenda. Recent headline themes in the housing press include:* local authorities to take on £30 billion of debt from April 2012;* Nottingham and Birmingham Councils to demolish 1500 homes;* 454 homes built by social housing landlords in the first 6 months of 2011;* household benefits to be capped at £500 per week (£26,000 per annum) from 2013;* Manchester Council to build 250 homes; and* new rented social housing to be let on fixed-term 'flexible' tenancies at up to 80 per cent market value affordable rents.The parallel reforms of the welfare benefits systems to create one universal credit add another layer of complexity to any discussion about the future of public-sector housing. Money is tight and government is announcing new policy on an iterative basis creating uncertainty across the housing sector, developers and financial institutions.BackgroundThe Labour government of 1997-2010 lefta significant legacy of refurbishment and renewal. It established the Decent Homes programme for social housing and the Housing Market Renewal Pathfinder programme for areas of failing housing markets. It introduced mixed tenure for new housing developments and increased housing supply with rates of new build in the public sector outstripping that of the private sector in Labour's final years. However, ambitions were thwarted by the collapse of the global money markets - banks stopped lending, developers stopped building and new build rates plummeted. By 2010, when the Coalition government came into power, caution had set in. The new government's strategy has been to completely change the ways in which new housing and estate renewal is paid for through a combination of reducing public funding, increasing rents and requiring social housing landlords to draw on their reserves and take on more debt through borrowing; the days of largesse are over. Money for both the National Affordable Housing programme and the Housing Market Renewal Pathfinders have both been cut, with the latter seeing funding reduced half-way through the programme, leaving 1000 residents living in blighted neighbourhoods and uncertainty as to how remainder of the work will be completed.The stability of the previous Labour government's funding model for new build involving a combination of social housing grant, cross-subsidy from shared ownership and private finance, has been replaced by a model which has a different ethos at its core. This model links 'additional' borrowing capacity from the private sector to new affordable rent levels. The Coalition government has completely rewritten the rules. To secure funding for new developments at low interest rates, housing organisations are offering bonds and establishing investment trusts through pooling resources. Jointventure vehicles are also being created between councils, housing associations and developers to build on empty land and continue with regeneration plans. An implication of this more commercial approach is that housing organisations have had to open themselves up to more private-sector scrutiny, including that of the credit-rating agencies. New approaches are being called for to harness the complexities resulting from the new funding landscape. Social housing landlords have had to become more innovative in how they maximise property values: numbers are being 'crunched' on a continuous basis, debts are increasing (especially for housing associations) and more risks are being taken on. The key components of the new funding regime are:* government grants;* financial reform of local authority housing revenue account; and* new rent structure - affordable rents.Government grantsTo incentivise local communities the government has introduced a financial package for new-build schemes, where agreed, and to encourage empty properties being brought back into use. …