Taking stock: social housing priorities in 2022 and 2023

Sector stocktake

As part of our service to clients, Altair conducts quarterly reviews of what has been happening across the social housing sector, including UK politics, governance, and regulation.

In December, we completed our last quarterly review for 2022. And what a year it was. We saw political turmoil, unlike anything in recent memory, with no less than five housing ministers in the space of a year. Michael Gove was sacked as Secretary of State for Levelling Up, Housing, and Communities in July before being reappointed in October, by our third Prime Minister of the year.

All this political turmoil somewhat took the wind out of the sails of (social) housing reform.

This year looks set to be equally busy (our second housing minister for 2023 is already in place…). In this blog, we want to focus on three key issues in social housing in 2022, looking back at what happened and forward to what providers need to think about for the year ahead.

Our three main takeaways are:

1. Consumer regulations and the Social Housing (Regulation) Bill
2. Poor conditions in social housing, specifically damp and mould, and
3. Building safety

Much of this is focused on England, given the complexities around secondary legislation and devolution.

Consumer regulations and the Social Housing (Regulation) Bill

Consumer regulation has been long awaited in the sector, following the issues laid bare by the Grenfell Tower fire in 2017 and subsequent social housing white paper in 2018. Some of the reforms, such as new Tenant Satisfaction Measures, do not require new legislation, but others do, such as new oversight powers for tenants and the Regulator. These changes are contained in the Social Housing (Regulation) Bill, which was laid before Parliament in June 2022.

The Bill, once enacted, will give tenants greater powers to access information and bolster the Regulator of Social Housing’s power to tackle poor performing landlords, all of which should drive up standards.

For the year ahead, we can expect the Bill to continue to be shaped as it progresses through Parliament, with implications becoming clearer once the Regulator has considered and consulted on them. Fiona MacGregor wrote to registered providers in April, encouraging them to act and prepare their organisation now.

In January, the Regulator set out its plans for implementing these, including stakeholder engagement and pilots of the new inspections. The Regulator will also be recruiting for inspectors and consulting on new standards, codes of practice and (due to increased costs) fee principles.

The Tenant Satisfaction Measures, which were consulted on in 2022, will come into force in April 2023. They require all landlords to collect and report on key satisfaction measures, including overall satisfaction and satisfaction with repairs and other services. Large providers, with over 1,000 homes, must report results to the Regulator annually, while smaller providers must publish results for their tenants.

Boards and executives should be incorporating the Bill’s known measures as principles to govern current and future strategy. This includes piloting the TSMs, appointing a responsible person for health and safety, piloting and testing communication with tenants and complaints handling, testing their customer engagement structure and reviewing how robust their accountability process is.

Poor conditions – damp and mould

In July 2022, the Levelling Up, Housing and Communities Committee’s inquiry into the Regulation of Social Housing concluded that “the condition of some [social] homes has deteriorated so far as to be unfit for human habitation”. In November, the sector was rocked by the coroner’s report into the death of two-year-old Awaab Ishak. This concluded that his death was directly linked to exposure to mould in his home and “will and should be a defining moment for the housing sector”. The coroner issued a prevention of future deaths report to the Department for Levelling up, Housing and Communities and Department of Health and Social Care.

The Secretary of State, Michael Gove then wrote to all providers of social housing asking for landlords to take responsibility for quality of social housing and treat damp and mould seriously, including making an assessment of incidences and actions around cases, to ensure “no family experiences such a tragedy again”. The severity was also underlined by the Housing Ombudsman’s letter to landlords, which stated that 42% of its severe maladministration decisions involved such cases.

Following letters issued by Mr Gove and RSH, large landlords had to report on cases and action to the Regulator. Initial results show that a small minority of social homes – perhaps 5% to 6% – have notable damp problems. The Regulator will also be following up with a minority of providers who submitted poor quality information, such as estimates based on old or incomplete data or no information at all.

The Regulator has made clear they expect providers to make improvements to how they protect tenants from the potential harm that damp and mould can cause. The Government has also tabled amendments to the Social Housing (Regulation) Bill to deliver Awaab’s Law, requiring landlords to fix reported health hazards within specified timeframes.

Going forward, Altair encourages registered providers to be more transparent and accountable on damp and mould cases and procedures, leading to a sector-wide shift in how cases are handled, focused on predicting and preventing rather than reacting.

We suggest several questions and actions are needed to support this, based on the Regulator’s focus on understanding, process and response. This includes reviewing repairs and complaints data, ensuring speed and effectiveness of services, skills and information sharing within and across teams, and improving how to evidence this to tenants, boards and the Regulator. Where capital investment is required, providers should look to early adoption of the PAS2035 principles of domestic retrofit to ensure business plans and designs encourage medium- and long-term planning at an asset level, coupled with stakeholder engagement and feedback.

Building Safety

In 2022, the Building Safety Act and Fire Safety Act were both enacted as part of better regulation following the tragic fire at Grenfell Tower.

Over the coming year, providers should expect to see the remaining provisions in the Building Safety Act come into force, including:

• Mandatory registration of occupied higher-risk buildings (HRBs i.e. at least 18 metres or 7 storeys and containing at least two residential units) with the new Building Safety Regulator (BSR). Registration opens in April and must be completed by October.
• From October 2023, all new HRBs must be registered with the BSR before being occupied.
• Further phases for the gateway regime, which triggers checks on safety measures for HRBs at every stage of design and construction. Gateway one (planning) is already in force, but this year should see gateway two (pre-construction) and gateway three (completion). A building cannot be occupied until all three stages have been completed.
• New duties for the Accountable Person, including registering HRBs, preparing safety case reports and preparing/maintaining the golden thread of information to safeguard residents and others.
• Commencement of mandatory occurrence reporting to BSR in relation to fire and structural safety issues.

There are a number of open consultations around Building Safety. As with other current regulatory and legislative changes, some of the implications of the two Acts will only become clearer over time, with secondary legislation. The Acts should drive up safety and lower risks. Necessarily, it will create more onerous processes. It could also lead to criminal charges and disputes if the requirements of the Act are not followed.

Our advice is that any owners of high-rise residential buildings should be collecting detailed and accurate information on any building to inform the golden thread of information. This includes details of construction, refurbishment and prevention and safety measures, and also taking reasonable steps to find any missing information required. Owners should consider how to store and maintain this during the building’s lifetime, including making it accessible to residents. They will also need to register occupied high-rise buildings with the BSR come April.

Finally, as part of the Building Safety Act, the New Homes Ombudsman opened in October 2022, taking complaints from new build homeowners unhappy with the quality of their home or service provided. Any housing providers developing should be registered on the New Homes Quality Board and working to the new code.

Altair is happy to help advise on any aspect of the above. Please contact:

• Anne-Marie Bancroft on consumer regulation.
• Dan Kujawski on housing quality and damp and mould.
• Kevin Harris for building safety.

If you’re a client and interested in receiving the sector stocktake, please contact Rebecca How on Rebecca.How@altairltd.co.uk.