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Crisis calls on Jenrick to ensure exempt accommodation funded by REITs is ‘properly regulated’

A national homelessness charity has written to the housing secretary raising concerns over what it says is the increasing number of reports of real estate investment trusts (REITs) funding inadequate accommodation for people at risk of homelessness.

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Picture: Guzelian
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Crisis calls on Jenrick to ensure accommodation funded by homeless REITs is ‘properly regulated’ #UKhousing

In a letter to Robert Jenrick this week, Crisis chief executive Jon Sparkes claimed that people at risk of homelessness were increasingly being provided with accommodation purchased or leased with the support of REITs, and that some of this accommodation is “inadequate, insecure and poorly managed”.

The charity has called on Mr Jenrick and his department to ensure this accommodation is properly regulated and the most vulnerable are protected.

This type of accommodation is commonly known as exempt accommodation, due to it being exempt from housing benefit caps. It is often used to house people at risk of homelessness with complex needs such as prison leavers, rough sleepers, refugees and migrants, and those experiencing substance abuse issues.

 


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The exempt status is given if some level of support or supervision is provided to residents. However, it means rents aren’t capped at Local Housing Allowance rates, which Crisis says can make it attractive to investors.

Crisis has received an increasing number of reports in recent months of REITs funding homelessness accommodation for these groups, and some were actively looking at working with local authorities to try and maximise returns through exempt accommodation.

It is often having to support residents living in these homes that provide unacceptably poor conditions, which it says is causing frustration for staff.

There are a number of providers across the country providing essential services to those in need through exempt accommodation but in some cases the services were found wanting.

 

The letter said: “The incidence of poor-quality provision has been in part enabled by the barriers faced by local authorities in ensuring effective oversight of the private rented sector, combined with historic weaknesses in regulating consumer standards in the social housing sector.”

In some cases, exempt accommodation is carried out by registered providers. In many cases this is delivered through managing agents or long arm landlords. However, it can also be provided by registered charities or community interest companies.

“Additional measures will be needed, encompassing both the registered and non-registered sectors, establishing a clear set of standards that all providers are required to achieve, and with an appropriate means of regulation and enforcement that allow local authorities to shape and improve the sector according to local need,” the letter said.

Commenting on the letter, Mr Sparkes said: “We desperately need sustained investment in social housing to tackle the unacceptable levels of homelessness in the UK.

“Until then, the private rented and exempt accommodation sectors will continue to play a role in meeting local areas’ housing needs. REITs providing exempt accommodation aimed specifically at people experiencing homelessness must be given our full attention, especially as they are being used to house people with highly complex needs.

“Over the past few months, we have become increasingly concerned by reports that the accommodation and support they are providing is inadequate, with no meaningful oversight. We are urging the secretary of state to investigate and ensure this housing is properly regulated.”

A spokesperson for MHCLG said: “All supported housing should be of good quality and provide the right support for residents.

“Our National Statement of Expectations for supported housing, sets out best practice for providers and recommended accommodation standards.

“Providers that are registered with the Regulator for Social Housing are required to meet its standards. Regulatory action has already been taken against providers that do not.

“We are currently running extended pilots in five areas, backed by £5.4 million, trialling new approaches to crack down on the small number of landlords who provide inadequate support to vulnerable people living in supported housing.”

Update at 16.54pm 22/04/21

A comment from MHCLG was added to the story

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