The Levelling Up, Housing and Communities (LUHC) Committee has
today launched an inquiry into the finances and sustainability of
the social housing sector in England, examining the financial
pressures facing social landlords and the resources needed to
meet a variety of challenges, including the need to build
thousands of new homes for social rent and the task of improving
social housing stock.
The new inquiry follows the Committee’s ‘Regulation of Social
Housing’ report (published in
July 2022) which examined the condition of social housing and
highlighted the appalling and unsafe conditions of some social
homes due to mould, damp, and leaks.
As part of its inquiry, the Committee will examine the current
range of grant funding available and the increasingly complex
financial and corporate structures proliferating in the social
housing sector.
The Committee’s inquiry will also explore the social housing
policy and regulatory challenges faced by the Department for
Levelling-Up, Housing and Communities, the Regulator of Social
Housing, and Homes England.
The full inquiry terms of reference are included further below.
Chair's comment
, Chair of the Levelling Up,
Housing and Communities Committee, said: “In the report on social
housing, the Committee shone a light on the appalling living
conditions faced by some tenants in social housing. Tenants
deserve better and it is right that social landlords, supported
by Government, step up their efforts to ensure homes are fit to
live in and that tenant complaints are treated seriously and
promptly.
“The social housing sector is in crisis. The reality is that
social landlords face a range of significant financial pressures,
not least the urgent need to invest in improving homes, so they
are not blighted by mould, damp, and leaks. The sector must also
meet the pressing demands to build thousands of new homes for
social rent, decarbonise the housing stock, and fix building
safety defects.
“In the Committee’s inquiry, we want to understand the extent of
these demands, the impact on the financial resilience of the
social housing sector, and the support and resources needed to
meet these challenges and ensure we have the supply of good
quality social homes we need for the future”.
Evidence sessions for this inquiry are likely to begin in June.
The finances and sustainability of the social housing
sector – inquiry terms of reference
The Committee welcomes written evidence on the terms of reference
outlined below.
The closing date for submissions is Friday 12 May.
The current state of financial resilience of social
housing providers:
- How would you assess the financial resilience of the social
housing sector currently? Are increasing pressures and
requirements putting financial viability at risk?
- What pressure has high inflation, increased energy costs and
any other additional costs placed on the finances of social
housing providers?
- To what extent can social housing providers maintain output
levels in housing development to provide a counter cyclical
balance in otherwise tightening market conditions?
- What impact have changes in the housing market in recent
years had on the strength of housing associations’ balance
sheets?
- Does the cross-subsidy model, by which market housing helps
pay for social and affordable housing, have any continuing
viability?
- To what extent have private equity investors, and in
particular international investors, been entering the sector?
What challenges does this present?
New challenges to the social housing sector:
- The Secretary of State has specified that more resources need
to be directed towards maintaining and improving the existing
stock. How feasible is this for social housing providers?
- How do social housing providers choose whether to undertake
new development or to focus on maintenance and upkeep of existing
stock? Is it currently possible to achieve both objectives?
- Where social housing providers are undertaking new
developments, what consideration has been given to the types
of homes they are building? For example, houses versus flats?
- What issues does the requirement on Housing Associations to
carrying out building safety present?
- Has the lifting of the cap on the Housing Revenue Account
made a difference to supply or improved housing from Local
Authorities?
- Have for-profit Housing Associations made the sector, as a
whole, more financially robust?
- Traditionally, struggling Housing Associations have merged
with stronger, sometimes complementary, Housing Associations.
Will this continue to be possible?
- To what extent can mergers result in the creation of an
umbrella group too large to discharge its duties and
responsibilities to its tenants?
- Has the emergence of partnership working between councils and
housing associations in local areas made the sector more
resilient? What encouragement has the Department given to such
partnerships?
- To what extent do local authorities and Housing
Associations collaborate when considering development plans
for housing locally?
- The Affordable Homes Programme includes a high proportion of
shared ownership properties. To what extent is this form of
tenure desirable for potential purchasers and for social housing
providers?
- What contribution have council owned housing companies made
to increasing social housing supply?
- Is the collapse of Brick by Brick – wholly owned by the
London Borough of Croydon – a one off or the tip of the
iceberg?
- Will the introduction of the Infrastructure Levy and changes
to section 106 significantly affect the capacity to develop
affordable housing?
What are the policy and regulatory challenges to the
Department and the Regulator?
- Is the current Departmental policy on social housing and
affordable homes appropriately focused?
- Is Homes England being directed appropriately by the
Department, and is it achieving its objectives?
- Has any evaluation been undertaken of the impact of the
additionality guidance on the supply of social housing?
- Is the current range of grant funding available appropriate
to address the issues and challenges that the social housing
sector faces?
- On our inquiry into Exempt Accommodation we found that issues
have arisen when providers are not registered with the Regulator.
How does the Regulator of Social Housing engage with Housing
Associations whose registration is voluntary?
- Does the Regulator of Social Housing have sufficient power to
ensure that mergers result in a financially viable new
organisation?
- Does the Regulator of Social Housing have adequate powers to
ensure:
- value for money; and
- low risk from new sources of finance such as private
equity?
- Does the Regulator of Social Housing have the resources and
skills necessary to regulate the increasingly complex financial
and corporate structures proliferating in the social housing
sector?
- How appropriate is the existing regime in respect of
regulating for-profit housing associations?
- It is already accepted that the numbers of dwellings likely
to be produced under the 2021 Affordable Homes Programme will be
less than initially forecast. Will the financial challenges that
the sector faces reduce these numbers even further?
