Housing sector

Inside Housing – Insight – Housing Week: Industry braces for looming ceiling

A weekly roundup of the most important headlines for housing professionals

Photo: Hiran Perera

dividing lines


A weekly roundup of the most important headlines for #UKhousing housing professionals

After months of anticipation, this week finally saw the government act on social housing rents.

On Monday we were whispered that a consultation was going to be launched to come up with options for the sector, and on Tuesday we saw what that would look like. Three proposals have been put on the table, with caps of 3%, 5% or 7% offered – along with a number of other connotations and exemptions. All of this is explained in detail in this summary from Grainne Cuffe.

In truth, it increasingly looks like the government will settle on a 5% cap from April, in a bid to shield tenants from the cost of living crisis.

And that is largely what the sector expected. In the weeks leading up to the announcement, most associations had the 5% cap in mind and had begun stress testing to determine the impact the loss of rental revenue might have on their budgets.

One such association is Optivo, which has already predicted that a 5% cap could see a £26m hole in its budget next year. And there are bound to be similar calculations going on across the country. A government impact assessment has estimated that a 5% cap could mean £1.2bn cut from budgets next year, compared to if nothing was done, and £7bn sterling over the next five years.

And that’s going to have a big impact on providers and the services they can offer. From decarbonization work to repairs to building new homes, they all look set to take a hit in the coming years.

This is explored in more detail in Stephen Delahunty’s in-depth analysis of the decisions and impacts of a rent cap.

This will also affect the social housing workforce. With the money coming from the budgets, pay rises for staff could be limited, and some housing association bosses have raised the prospect of increased industrial action.

This week hasn’t just been about rent caps. On Wednesday, the regulator issued a series of regulatory judgments. This included the news that the Royal Borough of Greenwich had breached the Home Standard, making it the latest major council in London to do so. The Industrial Dwellings Society was downgraded for its governance and financial viability after its board failed to properly consider much-needed investments in its aging fleet.

We also heard two big government announcements this weekend. He launched a program that would punish developers who failed to fix siding problems, effectively rendering them unable to build homes. And a consultation has been launched on setting a new decent housing standard for private rent owners.

And if you haven’t seen it yet, it’s worth reading Grainne Cuffe’s excellent survey of stock status surveys. At a time when social housing conditions are under scrutiny, she asks how often authorities check the status of their stock. Spoiler alert: not much.

Jack Simpson, Associate Editor (News and Investigations)

@JSimpsonjourno

Statistics of the week

400,000: the number of households that, according to the National Housing Federation, are not protected by the energy price cap because their homes are supplied by collective heating systems. The organisation, which represents housing associations in England, said these households face a potential bill increase of £68 per week or £1,130 per year, over the electricity price cap of ‘october.

quote of the week

“The equality impact assessment that accompanies this consultation is incomplete and grossly inadequate. Several protected characteristics have been wrongfully ignored and there is no evidence or data provided to support the assessment at each step”

Campaign group Disability Rights UK is letting the government know exactly what it thinks of its proposals for evacuating people with disabilities during a fire.

Editor’s Pick: Five Must-Read Stories

Revealed: How often do landlords really review the condition of their housing stock?

Government outlines plans to punish developers who fail to fix unsafe coatings

Regulatory judgments: London council breaches Home Standard after security checks missed on thousands of homes

Rent cap could leave landlords with less income to spend on staff, industry has warned

Fire chiefs warn government proposals on evacuating disabled residents ‘do not go far enough’

Sign up for IH’s long-term reading newsletter

Sign up for IH's long-term reading newsletter