The Week in Housing: RSH warns of financial crisis, and first non-compliant consumer grade issued

One issue highlighted in the report was how landlords are using asset sales to fund spending on existing stock. This sell-off now accounts for 21% of the money spent on repairs and maintenance, but is obviously not a sustainable approach in the long term.

Large housing association Sanctuary revealed that it is considering the sale of a portfolio of student accommodation, while another landlord has sold its telecare business to the healthcare subsidiary of a giant insurance firm.

A move that will help take a little bit of pressure off landlords on their existing stock spend was the announcement that the National Wealth Fund and two major UK banks will release £1bn of funding to accelerate social housing retrofit in the UK.

The RSH also looked at mergers and reminded landlords to think about the pros and cons, as well as the impact on residents. With that in mind, the boards of two landlords have given the go-ahead for the housing associations to merge into a new 55,000-home landlord.

The concern about the sector’s financial health comes as the government was told to increase supply-side grants for new homes to curb rising spending on housing benefit, a report from the Chartered Institute of Housing has recommended.

With the Consumer Price Index rising by 1.7% in the year to September 2024, social rents for 2025-26 can be increased by a maximum of 2.7%. However, Andy Hulme, chief executive of Hyde Group, said the latest figures show that the current metric for determining rent rises is “not sufficient in today’s environment”.

On the consumer side, the RSH issued its first C4 grading to a London council after finding 9,000 overdue fire safety remedial actions and a failure to self-refer. 

C4 is the lowest possible grade under the new consumer standards and means there are “very serious failings and fundamental changes needed” at an organisation. This is the first time a landlord has been found non-compliant following a planned inspection. 

The same council requested exceptional financial support from the government to deal with a 936% increase in temporary accommodation costs.

Following the RSH grading, the Housing Ombudsman has shared more than 100 cases of severe damp and mould as it warned that the issue now dominates half of its casework. Richard Blakeway said landlords “are still struggling with timescales” and inspections within damp and mould complaints, despite often having policies that set out clear actions and resolution times.

The sector has welcomed a delay to the Procurement Act 2023 coming into force until early 2025, as vital details are yet to be unveiled. The new legislation will overhaul procurement in the UK. One director called the law the “biggest change to public procurement regulations in a generation” and said that it therefore “needs to be right”.

There were a number of building safety announcements this week, after reports suggested the government is considering giving developers an 18-month deadline to begin building safety work.

This attempt to speed up the pace of remediation comes as Inside Housing revealed that the Building Safety Regulator (BSR) signed off just 14% of developers’ remediation plans in the past year.

The BSR said this is because of an “unexpected increase” in applications, which led to delays in processing, as well as high numbers of incomplete or unclear applications.

At Inside Housing’s Regulation and Governance Conference on Thursday, the deputy director of building safety at the Health and Safety Executive told attendees that assumptions and modelling related to the building safety regime have “not survived first contact with reality”. The director admitted that the BSR is having to “rebuild trust” after a challenging start.

At the same time, the government confirmed that fire safety will be excluded from any plan to strip back regulations after a speech on investment by the prime minister.

Inside Housing revealed that the Metropolitan Police has closed its investigation into the fire that took place in Dagenham on 26 August.

On homelessness, a charity found that the number of deaths of people sleeping rough increased by 42% in 2023 compared with the previous year.

In Northern Ireland, there were two calls for funding to tackle homelessness and deliver new homes.

Nicola McCrudden, chief executive of Homeless Connect, told the Northern Ireland Homelessness Conference that there must be a “concerted effort” to tackle the housing crisis head-on.

Meanwhile, the opposition party in Northern Ireland has called on the government to secure funding from Westminster to build 50,000 homes by 2032.

North of the English border, the Scottish Housing Regulator handed back more than £0.5m to the government last year, during what it called the most challenging year for social housing in over a decade.

In Wales, landlord Trivallis has started work to fix safety issues at 60 homes built with reinforced autoclaved aerated concrete.

The government has made a big splash about delivering 1.5 million homes this parliament. However, reports suggested that the chancellor and the housing secretary are in a stand-off about whether there will be an immediate top-up to the current Affordable Homes Programme.

It is unclear how the government intends to hit this target or go net positive on social rent homes, as promised, without billions in additional funding.

Many housing associations have reported plummeting development pipelines in recent months and the big developers cannot be expected to pick up the slack. The number of social homes delivered by Bellway decreased by 32% in 2023-24, as it reported a further £37m in legacy building safety costs.

Even with a new injection of cash, new research has warned that workforce shortages at councils due to budget cuts are putting Labour’s housebuilding ambitions at risk.

Inside Housing took a deep dive this week into how young people and teenagers can often be overlooked when it comes to resident engagement and met a group of young people researching how to change that.

Finally, as the past year has taken Jill Murray up mountains, into Downing Street, and onto the stage as president of the Chartered Institute of Housing. She spoke about her campaign to make housing EPIC.

Have a good weekend.

Stephen Delahunty, news editor, Inside Housing

Say hello: stephen.delahunty@oceanmedia.co.uk

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