HCA to probe associations' repairs cuts

The English social housing regulator, in its Sector Risk Profile document published today, said it would examine cost efficiencies landlords are planning in order to cope with the four-year, 1% annual rent cut.

The HCA said the mean major repairs cost per unit in the sector is forecast to decrease 10% from £1,032 in 2016 to £928 by 2020.

It said where costs appear “unusually high” it will challenge boards. However, it added: “We will also seek to understand the assumptions within business plans where there are significant reductions in maintenance and repair expenditure to gain assurance that this is not a sign of a registered provider failing to maintain its stock or a simple balancing figure in which significant capital investment programmes are being pushed to future years.”

The HCA also said associations relying on ambitious cost savings need to have clear plans in place and mitigations if they cannot be delivered.

The Sector Risk Profile document outlines key risks to the sector. The HCA warned that providers need to manage sales risk, which has increased due to more development of homes for sale. It said board skills and governance structures need to evolve to match the increasing complexity of providers’ businesses brought about by diversification.

It also cited Universal Credit, Brexit and deregulation measures in the Housing and Planning Bill as risks that providers need to be aware of.