English social housing sector under serious financial pressure
MPs have reported on the finances and sustainability of the social housing sector in England.
MPs have reported on the finances and sustainability of the social housing sector in England.
An inquiry into the finances and sustainability of social housing has concluded that the English sector is under serious financial pressure; with massive bills for decarbonisation, fire safety and the regeneration of old homes coming at the same time as a UK Government cap on maximum social housing rents. As a result, English social housing providers are cutting development plans to remain financially secure.
The report, published by the cross-sector Levelling Up, Housing and Communities Committee, has noted that the English sector remains resilient for the time being. However, it has made a number of recommendations around the roles of the UK Government, private investors and the English regulator in supporting English social housing.
First and foremost, the report calls for the UK Government to invest in social housing. It warns that using Government grant for affordable rent and shared ownership is inefficient when these homes can be built without direct grant support. The report further recommends that the UK Government should assess the role of appropriate private investment in providing affordable rent to free up grant funding for social housing provision.
The costs of decarbonisation and fire safety remediation are recognised as significant financial challenges, with UK Government support described as ‘insufficient’. The report also discusses the challenge that some homes cost more to remediate than they are worth, and calls for greater consideration of the benefits of regeneration.
Finally, the report calls for the English regulator – the Regulator of Social Housing – to take a clearer and more proactive approach to engaging with social providers facing greater financial risk; recognising that if even one housing association were to default on its loans, it could have a knock-on effect on the rest of the sector’s ability to attract investment.
While the English and Scottish sectors are regulated very differently, the report provides useful context on the approaches tried and tested in England, and their impact on social housing providers. With Scottish Government giving increasing consideration to the role of private investment in the housing sector, this provides both an opportunity to identify useful models, as well as potential risks for us to learn from. The full report can be found at: The finances and sustainability of the social housing sector - Committees - UK Parliament