Two new agencies

Following the introduction of parts 1 and 2 of the Housing Regeneration Act, a new regime was recently launched which saw the separate functions of funding and regulating social housing transferred to two new agencies. The Homes and Communities Agency ("HCA") will work with a wide range of groups including government, housing associations and private sector developers to provide housing and regeneration for England. In doing so, it will carry out a combination of roles which were previously conducted by the Housing Corporation, English Partnerships and local government, including grant-making and investment. The ambit of the HCA will even extend to acting as the local planning authority in some circumstances, providing it with the powers to ensure that its objectives are delivered properly. In contrast, the Tenant Services Authority ("TSA") is the new social housing regulator for England or, in other words, the "watchdog" for tenants.

Ways and means

The principal issue for both agencies during these tough economic times, when demand for social housing is set to rise, must be to ensure that quality, affordable housing is delivered, notwithstanding the reduction in property turnover and investment opportunities and the financial risks faced by many social landlords. The Chief Executive of HCA, Sir Bob Kerslake, has said that they will "explore flexible, tailored solutions that will keep the industry on track and bring benefits to people and places in the long term".

To meet this end, the government is considering with both agencies a number of possibilities including new types of land purchasing, changing the mix of housing in future developments to include a greater proportion of rent to buy properties and converting unsold housing stock into social housing.

Financial assistance

The HCA's funding powers are also broader than those of the Housing Corporation, making it possible for it to find more innovative ways of providing social housing. In particular, under section 19 of the 2008 Act, the HCA can, with the consent of the Secretary of State, provide financial assistance to any persons. That power may be limited in the future. For the time being, however, it is likely to make entering the social housing scene an attractive option for existing commercial developers in search of a new, more sustainable venture during the economic downturn. That is even more so given that such financial assistance can take any form, including grants, loans, investment or guarantee, and can be on such terms and conditions as the HCA considers appropriate (for example, terms for repayment can be with or without interest).

Profit-making providers

The old definition of registered social landlord ("RSL") has been replaced with the concept of registered providers of social housing. All providers of social housing will now be listed on a register and will become a "registered provider". A key distinction between this system and the old system of RSLs is that a provider of social housing can now be either a non-profit organisation or a profit-making organisation. Each body will be designated as one or the other upon being entered on to the register. RSLs will automatically become non-profit registered providers under the new system. However, some non-profit registered providers that were previously RSLs may now opt to include a profit-making registered provider in their group structure, in order to avoid some of the restrictions which are imposed on non-profit making bodies.

Low cost rental accommodation

Where a person receives financial assistance to either acquire, construct or convert any housing or other land for use as low cost rental accommodation (as defined by section 69 of the 2008 Act), the HCA must make it a condition of that assistance that, when the accommodation is made available for rent, the landlord of that accommodation is a "relevant provider of low cost rental accommodation". A "relevant provider of low cost rental accommodation" will include:

  • a registered provider of social housing;
  • a local housing authority;
  • a county council; or
  • a body controlled by such an authority or county council.

As a result, if a private sector housing company intends to apply to the HCA to fund low-cost rented accommodation in relation to which it will ultimately be the landlord, it will, therefore, first need to apply to the TSA to become a profit-making registered provider.

There is a lot still to be seen in relation to how the HCA will implement its powers in practice. However, it would appear that it has at least been given some of the powers necessary to bring about its aim; "to create opportunity for people to have homes they can afford, in places they want to live...". It would also appear that the HCA has the potential to assist not just the social housing sector but also the property industry as a whole, should it resolve to do so.