Intensifying pressure on social housing sector to deliver more homes, while servicing existing stock, in a tough financial climate
The Regulator of Social Housing (RSH) has released its annual sector risk profile report examining the viability risks social landlords are operating under.
The publication identifies the main risks to the sector over the last year as social landlords face increasing pressure to deliver both more and better social homes against a backdrop of higher borrowing costs.
Fiona MacGregor, Chief Executive at RSH, said: “Most housing associations are investing record amounts in new and existing homes without threatening their financial viability.
“However, some individual landlords face particular pressures, and we expect those to sustain for some time before the position eases.
“There is very little margin for error, and it is absolutely critical that landlords are well run, with robust systems for identifying and mitigating risks.
“Boards must maintain a real clarity of purpose to successfully navigate these competing demands while remaining financially viable.”
The report provides the regulator’s view of the most significant risks to providers’ ongoing compliance with its regulatory standards.
It says tenant safety is a fundamental responsibility for any landlord. This includes required assessments for fire, gas, electrical, asbestos, water, lift safety, and ensuring the presence of carbon monoxide detectors and smoke alarms in all required homes.
Assurance on tenant safety must be underpinned by accurate, up-to-date, and complete data, including through physical inspections of properties to assess the presence of hazards under the Housing Health and Safety Rating System.
Landlords also need to take a proactive approach to identifying and tackling damp and mould.
Fire safety remains a key priority, particularly in multi-occupied medium and high-rise buildings.
Social landlords are currently spending record amounts on repairs and maintenance and forecasting further substantial increases. However, skilled labour shortages continue to impact repairs and maintenance programmes and demand for damp and mould work remains high.
The RSH says boards and councillors must understand the condition and quality of tenants’ homes and ensure that, as a minimum, homes meet the requirements of the Decent Homes Standard.
London and other urban areas are experiencing the most acute financial pressures particularly where large numbers of flats need building safety works.
These challenges are expected to persist for the foreseeable future, as social housing undergoes a long-term shift, with higher borrowing costs and an ongoing need to maintain and invest in tenants’ existing homes and build much needed new homes for the future.
RSH has already identified a number of individual landlords who were not financially viable and who have since merged with others to protect tenants’ homes and lenders’ capital. RSH expects that more individual landlords will fail to meet the outcomes in its economic standards over the coming months, as this challenging environment continues.
RSH has a range of tools – including inspections, yearly stability checks and quarterly surveys – to identify emerging risks and work with landlords to mitigate these as far as possible.