Regulator: reputational risk for housing associations ‘greater than ever’

Fiona MacGregor, chief executive of the Regulator of Social Housing, said: “The aftermath of the Grenfell Tower fire has seen unprecedented scrutiny of the social housing sector, landlords’ relationship with their tenants and public interest in the sector’s wider social role.

“In this context providers must show how they are delivering on their social purpose and objectives, and meeting their promises and commitments.

“Where things go wrong, providers should be open and transparent and look to put the issue right as quickly as possible. Failure to do so could not only undermine stakeholder confidence in individual providers but also affect the reputation of the sector as a whole.”

The risk profile also included a section on lease structures and private equity, an area the regulator has focused on recently, investigating four housing associations with links to private funds and real estate investment trusts.

It said that possible risks in this area are index-linked rental payments, contracts without break clauses, void risk, highly dispersed stock patterns and the protection of repairs funds.

Inside Housing understands the regulator will issue a separate report on this area at a later date.

The regulator also issued a warning on health and safety. It noted that associations have made significant investment in fire safety following the Grenfell Tower fire, but added that social landlords should consider the full range of health and safety requirements.

According to the regulator’s forecasts, associations are still looking to make savings to account for the rent cut imposed by George Osborne from 2016.

On development, the regulator warned that housing associations need to consider the “trade-offs” between building new homes and investing in their existing ones.

It also noted that there are risks associated with development itself, such as the possibility that a pipeline of land could reduce in value if there were an economic downturn.

Similarly, it warned housing associations to have “alternative options” and “exit strategies” for their market sale programme in the event of a sales downturn.