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No evidence of housing associations setting up for-profits ‘en masse’, says regulator
England’s social housing regulator does not expect many housing associations to follow Hyde in setting up for-profit providers.
Fiona MacGregor, chief executive of the Regulator of Social Housing (RSH), said it had seen “no evidence… at all” that the sector will move to registering for-profit landlord subsidiaries “en masse”.
However, she warned that any organisations considering such a step should be “really clear” about their reasons, adding: “Does the board know when the profit is going to come out? If it needs to be taken out by realising the arbitrage value of the properties, what does that mean for tenants?”
She was speaking at the first session of Digital Housing Week on Monday.
Earlier this month, 55,000-home landlord Hyde became the first housing association to announce plans to set up a for-profit social housing provider.
It has submitted an application to the RSH and hopes to use the for-profit to harness capital from pension funds seeking ethical investments.
For-profits have grown significantly in number over the past two years, with several developers and investment firms registering social housing arms.
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Later in the session, Ms MacGregor revealed that the regulator is seeking volunteers for virtual in-depth assessments (IDAs) over the summer as a precursor to resuming the programme in full.
She said: “This is not just about ensuring that remote IDAs will work, but also about ensuring that the IDA is tailored to the specific risks of the ‘new normal’ of the pandemic recovery – including how boards are ensuring their organisations can be resilient in the face of ongoing challenges.”
She added: “Somewhat surprisingly, we’ve had loads of volunteers already.”
The RSH put IDAs on ice in March, as a result of the coronavirus pandemic.
Ms MacGregor praised the sector’s response to COVID-19, particularly social landlords’ “clear-eyed focus on tenants”.
“In aggregate, how the sector has coped thus far is probably at the upper end of what anyone might have predicted at the outset,” she said.
But she noted that “the operational context remains challenging, and that on some matters, such as gas safety checks, the position may get worse before it gets better”.
“As lockdown eases, the premium on communication with and listening to tenants and residents has never been higher,” she added.
Referring to the Black Lives Matter movement and the killing of George Floyd, she said “transparency and accountability to tenants, residents, staff and stakeholders matter more than ever”.
