Sector’s financial position heading towards same ‘sort of space’ as 2008 financial crisis, RSH says

He said: “I just about remember being in housing in 2007-08, when the sector effectively got bailed out by the government in the midst of a financial crisis after a bunch of housing-related derivatives blew up in their faces in December 2007, and that was a pretty scary time.”

Mr Walters said there are some organisations that are in a better position than others, before adding that London landlords – both housing associations and councils – are under pressures.

“You will have seen that we issued our first-ever C4 on Newham Council yesterday. There is no doubt that those financial pressures are playing out in London councils just as much as they are playing out in housing associations.”

Newham Council was given the C4 grade following an inspection – it had failed to self-refer over any of the safety failures. 

Mr Walters highlighted the extra pressures councils are under in terms of massive temporary accommodation costs. 

“There is no doubt that if you’re trying to provide social housing in London and provide it well, it’s really hard work,” he said. 

But he added that “just because it’s difficult”, it “doesn’t mean that you get a free pass”.

“Because at the end of the day, we are talking here about tenants’ homes, tenants’ lives. Those tenants deserve to live in decent accommodation, safe accommodation, wherever they are in the country,” he said. 

“The one thing I will just say is the thing that makes the system work well, the thing when the system works best is when providers are open and honest with us at the regulator.

Mr Walters said the RSH is “much more able to help” and “deal with issues when people come and talk to us”. 

“So please do not hold off and pick up the phone, from self-referring, from talking to us.” he said.

Mr Walters said that, from now, the sector needs to prepare for any rent settlement and stress-testing for any scenario. 

Richard Blakeway, the housing ombudsman, said the watchdog can work as a “canary in the coalmine” for struggling landlords. 

He spoke about early warning signs at Newham, saying it was “unsurprising” that the London landlord had so many outstanding repairs. 

“Back in the day when there weren’t many severe maladministration findings, indeed, only three landlords received them in 2020-21, you can guess that Newham was one of those landlords. 

“One of the things which we said in our assessment to Newham was that they could not demonstrate their process and policy around handling repairs. 

“In July this year, there was a severe maladministration finding published in relation to Newham. One of the things we said in the assessment was they could not demonstrate their policy and process for repairs. It is unsurprising, therefore, to me, that Newham had 5,400 open repair jobs, and that many of those were overdue.”

He said something he sees “repeatedly” is landlords unable to provide adequate records to “demonstrate they know what is going wrong”. 

“It is simply not credible that a failure in records of knowledge and information management in one area is isolated and everything else is brilliant”, Mr Blakeway said. “There are probably 20 providers, housing associations and local authorities in London, and some outside London, large and small, who are repeatedly appearing in our case work in different ways for different indicators.

“Whether it’s the range of complaint categories that we see, whether it is not handling a complaint effectively in pre-investigation, whether it’s not complying with our orders.”

Tim Galloway, deputy director of building safety at the Health and Safety Executive, spoke of the challenges of the new building safety regime. 

Legal experts have previously called for more capacity at the Building Safety Regulator (BSR) as sign-off delays are “causing real problems”.

Mr Galloway said it has been a “challenging six to 12 months” for the BSR for two reasons. 

He said that “our assumptions and modelling”, some of which was “tested and very long-standing” have “not survived first contact with reality”. 

“There have been different building control applications and different numbers to those we expected; that has affected the resources that we have and how we’ve worked. 

“And there have also been more demands upon us from external sources than I think we anticipated. External stakeholders of all varieties have asked us questions, expected us to have done things, thought about things, and we have been running around setting the thing up.”

He warned that some in the industry, including the social housing sector, are “starting to focus on the process rather than the outcomes to be achieved”.

Mr Galloway said: “We are asked ‘how do you want us to complete this building control application?’ 

“That worries me, because to me, the question that ought to be asked is ‘have I assured myself that the design I’m submitting to the Building Safety Regulator on this high-risk building will meet the functional requirements of the building regulations?”

He added: “Together we will learn how to make that process more efficient, believe me, but right now I’d be asking you to focus on getting the outcomes right.

“Because if we look back to Grenfell, there was not a focus on outcomes and we’ve seen how that turned out.”

He also urged the sector to read and learn from the second and final Grenfell report. 

Helen Shaw, director of regulation at the Scottish Housing Regulator (SHR), told the conference about the pressures facing the sector in Scotland, where a housing emergency has been declared.

Ms Shaw said: “There are record numbers of homelessness applications in Scotland. There are record numbers of people living in temporary accommodation and record numbers of children living in temporary accommodation for increasingly long periods of time. 

“We’ve seen the number of homelessness applications continue to rise, and we’ve seen a significantly marked increase in failures by local authorities to meet their statutory duties.”

She said those statistics are “very much reflected” in what the SHR has seen through its engagement with councils.

“At this point in time, there is a real risk that most statutory failures become endemic in some council areas. In our view, systemic failure requires systemic intervention, and over the longer term, that’s about reducing the demands on the system by preventing homelessness.”

The Scottish government is looking to introduce further legislation around homelessness prevention in the forthcoming Housing Bill.

But Ms Shaw said that “for now, the immediate focus has to be about increasing the capacity in the system to meet the current level of demand and need”.