A Roundup of the Social Housing Sector in 2021
Major policy developments in the social housing sector in 2021
For the social housing sector, the past year has presented a range of unique challenges, against the backdrop of pandemic recovery and substantial shifts in policy and regulation. Several sector-wide themes have defined 2021 and will be key to decision-making for registered providers and other stakeholders as we make our way into 2022. We summarise these in the following update.
Whether it is the need to remedy poor living conditions, growing demands to retrofit homes for energy efficiency, or the cost of cladding and building safety remediation, asset management challenges have been at the forefront for social housing providers in the past year.
In March 2021, ITV News released a shocking story about conditions at a London Borough of Croydon tower block on Regina Road, in South Norwood. One of the tenants described her numerous attempts to contact and complain to the council, explaining that the way she has been treated “makes me feel like I am not even human”.
Despite Covid-19 causing significant delays in the repairs and maintenance of homes due to social distancing restrictions, these conditions nonetheless represent catastrophic failings within the sector.
The ITV documentary was also not a one-off. Increasingly we are witnessing tenants taking to social media to voice their complaints about unacceptable living conditions. For example, activist Kwajo Tweneboa has highlighted several cases, drawing attention to several housing associations across the country.
British homes account for almost 15% of the country’s carbon emissions. With this in mind, the UK government introduced Wave 1 of the Social Housing Decarbonisation Fund in August 2021. The fund set to be released in four waves, began with £160 million available to aid the financial challenges of retrofitting social housing with an EPC rating of D or below in England. However, the fund, totalling £3.8 billion, is only a drop in the ocean considering the likely total cost of converting English housing association stock to net-zero, which is estimated to be circa £36 billion.
In 2022, we can expect the Building Safety Act to replace the 2005 Fire Safety Order. The Act contains a number of changes around the way in which high-rise buildings are built and managed. It will introduce new duty holders at every stage of a building’s life cycle and set up a new Building Safety Regulator.
The remediation work required to meet these new rules and expectations will be significant. It is estimated that 1 in 10 planned new homes may not be built because of financial pressure arising from building safety costs alone. In combination with maintenance and retrofitting costs, registered providers are facing mounting financial challenges.
2021 also marked the beginnings of significant change for the role and remit of England’s Regulator of Social Housing (RSH).
The RSH set out its stall in its publication “Reshaping Consumer Regulation”, published in November. Of the ten fundamental objectives mentioned in the paper, five relate directly to giving tenants a louder voice in the day-to-day management of matters which affect them.
This focus on the “tenant voice” is in line with the commitments made in the Social Housing White Paper of 2020 and comes as the Housing Ombudsman has recorded a marked increase in the volume of customer complaints and enquiries since 2020 (in response, the Housing Ombudsman is planning reforms of its own, designed to increase the accessibility and inclusivity of its complaints process).
Asking landlords to listen to their tenants may sound simple, but the sector knows how challenging getting customer voice activity “right” is. As noted by the RSH itself in the latest edition of is annual Consumer Regulation Review, many landlords are actively trying to engage with their tenants to get ahead of new regulations.
Yet scandals like Regina Road show us that social housing tenants are still ignored far too often, while the Grenfell Tower Inquiry, now in its fifth year, has emphasised just how serious the consequences can be when tenant concerns are not taken seriously.
The upcoming Social Housing Regulation Bill is designed to equip the RSH with the powers it needs to implement provisions set out in the 2020 social housing white paper “A Charter for Social Housing Residents”. The Bill will get rid of the existing “serious detriment test,” which placed strict limits on the RSH’s ability to intervene in the affairs of registered providers. In its place will come three tools: routine inspections on large providers (including local authorities) every four years; reactive inspections when required, in tandem with the Housing Ombudsman and the new Building Safety Regulator; and key performance indicators (KPIs) to monitor tenant satisfaction, to be published each year by providers.
The sector should be ready for these changes to come into force very soon: political insiders report that Secretary of State for Levelling Up, Housing and Communities, Michael Gove, is planning to fast-track the Bill’s publication to occur this month.
“Levelling Up” and Cost of Living
When Gove, widely regarded as a political heavyweight, was appointed to the role in September (replacing Robert Jenrick), his new department was rebranded to align with Prime Minister Boris Johnson’s “Levelling Up” agenda.
Despite its central place in government messaging for some time, the meaning of “levelling up” took form in 2021. In February this year, Gove announced some concrete targets for “levelling up” the British economy. Amongst other pledges to “shift both money and power into the hands of working people,” Gove committed to redeveloping 20 sites across the UK and overturning an existing rule which reserves 80% of public spending on housing for London and the South-East.
In light of these ambitions, the government faces an uphill struggle in the short term. While economic growth has rebounded better than some had feared at the outset of the pandemic, the next few months will be defined by an escalation in the cost of living crisis which has already seen inflation rise to 5.5% as of January 2022.
Consumers on low incomes are expected to be hit particularly hard by a global rise in gas prices, and a corresponding raising of the British energy price cap in April. The regulator, Ofgem has announced that the cap will rise by a substantial 54%, or £693, to reach an average of £1,971.
So far, the government has promised three countermeasures – a one-off “discount” of £200 will be applied to each household’s energy bills in October (which will have to be repaid in £40 instalments during 2023-7); households in council tax bands A-D will receive an additional £150 rebate on their bills in April; and £150m will be disbursed to local authorities, to spend as they see fit.
Whether in terms of asset management, abiding by more stringent consumer regulation, or fulfilling the uncertain promises of levelling up, the year ahead presents challenges to social housing providers but also opportunities to get ahead, drawing on funding to deliver plans where available.
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