2024 brought another significant year for the regulation of Registered Providers (RPs). The new consumer standards came into effect in April, and following that, the first wave of inspections by the Regulator of Social Housing against those standards and we saw the first C grades for compliance.
Given the well-publicised issues around the sector relating to safety and quality, the number of RPs who have been able to obtain the top C1 grade has been a pleasant surprise. There are though numbers of RPs that have received a C3 grade and two that received a C4 grade (both being local authority RPs).
Consultations have begun on the implementation of two new consumer standards and we have had the publication of the first year of outcomes from the tenant satisfaction measures.
At the same time, the Housing Ombudsman has been incredibly active, with over 21,000 interventions in the last year, which is a three-fold increase from the year before.
We then of course, had the general election, a change of Government and the beginning of a consultation about a potential five year rent settlement at CPI+1%.
We expect to see many of these themes running into 2025. Particular issues we expect to see are:
Consumer standards
We will of course, see a continuation of C grades being issued against RPs for their compliance with the consumer standards. Overall, the grades issued to date have been fairly evenly split between C1, C2 and C3, with only two RPs receiving a C4 grade. This is a recognition of the fact that although some RPs are meeting the required outcomes, the general position is that improvements are needed across the sector. Of course, addressing issues around safety and quality is not an overnight fix and we expect to see grades continuing to be issued in similar proportions across 2025 and for similar themes to continue to surface in those inspections. Specific issues that are likely to come out of future inspections include:
- a lack of evidence about the condition of properties, particularly incomplete or outdated stock condition surveys;
- gaps in relation to health and safety compliance, with numbers of outstanding gas or fire safety checks and lack of smoke or carbon monoxide alarms being particularly common;
- significant backlogs of repairs, with both high numbers of outstanding repairs and long delays in having those repairs carried out. Similarly, backlogs for dealing with urgent repairs;
- numbers of homes not meeting the Decent Homes Standard;
- lack of proper processes in place to assess and mitigate the risk to tenants living in homes where issues are outstanding;
- failures to establish proper tenant engagement structures where tenants have meaningful opportunities to scrutinise and influence decisions; and
- issues with the collection of tenant satisfaction measures survey data.
Linked to this, we also expect to see Awaab’s Law introduced in 2025. This forms part of the implementation of the Social Housing (Regulation) Act 2023 and includes details of specific timescales by which landlords are required to carry out repairs and other actions
Following consultation, we are also expecting details on two new consumer standards to be published this year. The new standards to be introduced are:
- competency and conduct – requiring housing managers to obtain specific qualifications; and social tenant access to information requirements (STAIR) – allowing tenants to request certain information from their landlord about performance and compliance.
At this stage, we have a good idea about what will go into the new standards because of the consultations. Implementation may take place this year or, perhaps more likely, in 2026.
What you can do now:
- begin preparing for your inspection, with particular focus on the types of issues mentioned above;
- pay particular focus to repairs and maintenance services in anticipation of the changes proposed by Awaab’s Law; and
- start the process for ensuring that relevant staff will have appropriate qualifications;
Housing Ombudsman
In our 2024 housing forward view, we predicted an increased number of findings of severe maladministration against RPs from the Housing Ombudsman, although we could not have predicted the size of the increase. Interventions from the Housing Ombudsman increased to over 21,000 instances from 7,000 the year before.
The Housing Ombudsman has become concerned that the number of failings could lead to desensitisation in the sector to the severity of these. It has therefore taken to publishing spotlight reports, looking at cases collectively around common issues such as damp, mould and cladding.
This trend of high numbers of findings of failings shows no sign of abating and we expect to see regular findings of severe maladministration against RPs in 2025. We also expect to see the Housing Ombudsman being very vocal publicly about the issues it encounters and producing several reports on common themes for the sector to learn from.
What you can do now:
- review the spotlight reports from the Housing Ombudsman to ensure you are addressing those common issues;
- review your overall complaints handling process so you can try to resolve issues with tenants without them needing to refer to the Housing Ombudsman; and
- look particularly at your repairs service, since this is the most complained about aspect of RP business and has the strongest correlation with tenant satisfaction.
Rent
The initial proposal by the new Labour government was for a 5-year rent settlement at CPI+1%. At the end of 2024, they put this proposal out for consultation. The certainty of a 5-year rent settlement at CPI+1% would of course be welcome after the recent rent cap of 7% in 2023/24 and the rent cut of -1% in the four years from April 2016. However, a general feeling around the sector is that any rent settlement should:
- be enshrined in law so it cannot be amended across the settlement period;
- be for 10 years to allow greater certainty and to facilitate the necessary investment in existing stock and development of new homes; and
- include a mechanism for rent convergence to allow differing rent levels to be brought in line with one another.
At this stage, we cannot say how Government will land on this issue. but we expect to see final recommendations this year.
What you can do now:
- Ensure your financial models are sufficiently robust and that stress-testing mechanisms are calculated on genuine worst-case scenarios.
Affordable Homes Programme
Another commitment Labour made as part of its election campaign was for a £500m increase to the Affordable Homes Programme to facilitate more development with a view to achieving its ambitious target of £1.5m new homes over the next five years.
Further detail of the new Affordable Homes Programme commitment is expected to be announced after the Spring Spending Review in April.
What you can do now:
- Consider the viability of your own development pipeline with or without an increase to the Affordable Homes Programme.
New legislation
In 2025, we expect to see a raft of new legislation being introduced. This should include a Renters' Rights Act which seeks to make significant change to the law around renting homes. Most publicised is the proposal to abolish s20 no-fault evictions, but there are several other changes to be aware of;
- reform of Right to Buy has been considered in a consultation which will conclude in January 2025;
- new legislation to ban new leasehold flats and the publication of a white paper on reforms to common hold, both of which Labour has publicly committed to; and
- a new Decent Homes Standard has been talked about with the current suggestion that this will be consulted on in the early part of 2025.
What you can do now:
- ensure you keep up to date with the proposals as they are published so you can anticipate their impact on your RP;
- review your tenancy agreements in light of the proposals in the Renters' Rights Bill so you can anticipate the changes necessary.
Darren Hooker is a partner at Capsticks.