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Regulator warns social landlords over rent requirements ahead of April increase
The Regulator of Social Housing (RSH) has issued a warning to housing associations and councils over its requirements on rents ahead of the April increase.
In a new addendum to its Sector Risk Profile, the English regulator pointed to social housing rents being calculated incorrectly following government policy changes as the “root cause of a number of cases of regulatory non-compliance”.
Homes falsely treated as exempt from rent rules, wrongly calculated service charges or Affordable Rent, non-compliant bespoke rental products and poor-data quality were also highlighted as common ways to breach RSH’s standards.
A new ‘Rent Standard’ from the regulator comes into force on 1 April, as social landlords are able to raise rents for the first time since 2016 following four years of rent cuts.
Failing to comply with government policy on rents “undermines the value of social housing” and “risks damaging the reputation of individual providers and the sector as a whole”, the document warned.
It added: “Rent rules can be complex but adhering to them is a fundamental part of being a registered provider of social housing.”
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The new Rent Standard will apply to councils with retained housing stock as well as housing associations – this is the first time that one of the RSH’s economic standards has applied to local authorities.
From 1 May, the RSH will start issuing regulatory notices against social landlords which fail to meet its rent and data quality requirements, and may follow these up with regulatory downgrades.
The move has been prompted by the RSH’s view that there is “scope for improvement” in rent setting across the sector, the addendum said.
Councils will still not receive regulatory judgements as they are not subject to the RSH’s governance and financial viability standards.
Fiona MacGregor, chief executive of the RSH, said: “Co-regulation remains at the heart of our regulatory approach, so it is imperative that registered providers’ boards and local authority councillors are assured the risks we have identified are being effectively managed when setting rents for social housing.
“Where we lack sufficient, timely assurance of compliance with rent or data quality requirements we will take appropriate follow-up action with the registered provider.”
The RSH has updated its Regulating the Standards document, which sets out the body’s expectations of social housing providers, to include the requirement for local authorities to complete a data return and warning that it will start issuing regulatory notices for non-compliance with the Rent Standard.
Minor tweaks have also been made to sections on interim regulatory judgements and in-depth assessments.
The Sector Risk Profile addendum also sets out guidance on how the RSH will police the new Rent Standard.
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