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Industry news


More than 150,000 social rent homes ‘lost’ in five years


through sales or being re-let at higher rent levels, according to analysis from the Chartered Institute of Housing. The organisation, which represents housing


M


professionals, is predicting that the figure will rise further to 230,000 by 2020 if current policies persist, making it increasingly difficult for people on lower incomes to access a decent home at a price they can afford. The CIH argues that Government Ministers must


focus on affordability as well as on building more homes to fix the country’s broken housing market. According to CIH chief executive Terrie Alafat the Government should take an urgent look at shifting funding from the private ‘for sale’ market towards the building of genuinely affordable housing. Figures from the Ministry of Housing,


Communities and Local Government and Homes England show that 103,642 council homes and 46,972 housing association homes for social rent were lost between 2012 and 2017. Most of the losses were down to homes either being sold through the right to buy scheme, or being converted from social rents to the much higher ‘affordable rents’. A smaller number were demolished, but this still outnumbered the new homes provided for social rent.


ore than 150,000 of the most affordable rented homes have been lost across England in just five years – either


Based on current trends, the CIH is projecting


that upto a further 80,000 homes currently let on social rents will be lost by 2020 – consisting of 55,500 council homes and 24,500 housing association homes. Typically social rents are several thousand


pounds a year below affordable rents (enough to make a big difference to low income households), as the latter are normally set at 80 per cent of the local market rent, whereas social rents will usually be at 50 to 60 per cent, but the percentages and rent levels vary according to the local authority area and council policies.


TRULY AFFORDABLE CIH chief executive Terrie Alafat praised the Government’s focus on housing and the extra investment in building more homes, but urged a change of direction. She said: “For many people on lower incomes, the only truly affordable option is social rent. It is simply unacceptable that we are losing so many of our most affordable homes at a time when more and more people are in need.” Last year Prime Minister Theresa May


announced an extra £2bn investment in affordable housing, including some support for social rent while the Budget outlined the Government’s ambition to deliver 300,000 new homes a year. “Our analysis shows that 79 per cent of the housing budget up to 2020/21 is directed towards


Tough approach from regulator leads to downgrades


In a series of grading revisions, the Social Housing Regulator has shown itself taking a tougher approach with housing associations over governance failings and flawed risk assessments connected to development work. Radian, a large south east social landlord with


nearly 21,000 homes has been downgraded for governance from G1 to G2 after the regulator said a planned growth in its house building programme had been delayed while the board put in place the required skills, systems and structures needed to deliver its plans. There had also been limited reporting to the board on the development programme, cashflow forecasts and budget performance. The financial viability rating was unchanged at V1. The association plans to increase its building programme from 500 new homes to between 600 and 700 a year. East Anglian based Suffolk Housing Society had


its governance and financial viability ratings downgraded from G1 to G3 and V1 to V2, making it non-compliant with the governance standard. The regulator was critical of the board of the 2,900 home


HA, saying it “failed to demonstrate an effective approach to reporting, quantification and management of key risks”. It also found weaknesses in the association’s internal controls assurance arrangements and its ability to deal with financial risks in its operating environment. Islington & Shoreditch Housing Association


which owns around 2,500 homes across six London boroughs, had its governance downgraded from G1 to G2 following an in-depth assessment which concluded the board was failing to adequately control or oversee health and safety issues including fire safety. It retained the V1 rating for financial viability. Byker Community Trust, which manages 1,800 homes on the Byker Estate in Newcastle, also had its governance downgraded from G1 to G2, for failing to demonstrate a systematic, risk based approach to internal controls assurance. Its financial viability rating of V2 was unchanged. Four housing associations have been


downgraded from V1 to V2 as a result of concerns over their financial viability arising from increased


8 | HMM March 2018 | www.housingmmonline.co.uk


private housing, with just 21 per cent going to affordable housing. Rebalancing this budget, so that more money is spent on affordable homes, could make a big difference.” Terrie Alafat added: “We need to increase the


number of homes we are building but it’s not just a numbers game – we need to make sure we are building the right homes, in the right places, and that people can afford them.” The building of new homes for letting at


social rents has fallen to a trickle with just 5,380 built in the last financial year and 50,290 built in the past five years, with most of these financed by social landlords using a combination of sales receipts, cross subsidies, reserves and loans. So they were provided in spite of the Government’s policies, rather than because of them. This directly challenges the Prime Minister’s much publicised commitment to help the ‘just about managing’ (JAMs) when she was first elected. The CIH says the Government could also make


some simple changes to the right to buy scheme to help councils build more homes to replace those sold. “We think local authorities should be able to keep 100 per cent of the money they receive from sales, rather than having to hand most of it over to the Treasury, as is currently the case. The Government could also give councils more time to use the receipts.”


development programmes and/or declining surpluses on new lettings. The landlords are: First Choice Homes Oldham, Connexus Housing, Cambridge Housing Society and Nehemiah United Churches Housing Association. Small specialist housing provider First Priority


HA has been found to be non-compliant with the governance and viability standards. The Regulator of Social Housing found the board was performing badly in terms of long term planning and risk management, putting its financial future under threat. The HA provides just over 1,000 bedspaces of accommodation for adults with mental health problems and learning difficulties, in 227 properties across 50 council areas. The regulator found two medium to large sized


associations breached its Home Standard over safety failings in tenants’ homes, but has allowed them both to retain their top G1 ratings for governance. Vivid found last year that a number of its homes had not received gas safety checks for several years while Raven discovered failings in its testing programmes for electrical safety and Legionella in water tanks. All the problems were historic and have now been put right but it remains unclear what the outcomes would have been, if the problems had been reported to the regulator at the time they occurred.


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