The recent Autumn Budget, Labour’s first in over a decade, didn’t put social housing at the heart of its agenda but it has promised much-needed funding and measures to address the growing housing crisis.
For social housing landlords, the changes introduce both new opportunities and some compliance considerations.
Here’s a look at what the Budget means for your obligations and what you need to prepare for in light of these recent developments.
Affordable Homes Programme
The Chancellor’s £500 million boost to the Affordable Homes Programme (AHP) will be welcome news to landlords hoping to increase housing supply, with the funding set to extend development activity until 2026.
However, this cash injection is forecast to produce only 5,000 new homes – a fraction of Labour’s ambitious target of 1.5 million homes over five years.
Given this shortfall, you will need to think strategically about how you can leverage funding, manage compliance with safety regulations, and navigate planning permissions as they work to bring new stock into the market.
The emphasis on development requires landlords to ensure their operations are compliant with planning, building control, and safety standards from the outset, particularly in light of recent Government scrutiny on social housing quality.
Right to Buy reforms: safeguarding social housing stock
The Budget’s revision to Right to Buy presents a dual impact.
Firstly, the reduction in Right to Buy discounts may curb the loss of social housing stock, while allowing councils to retain 100 per cent of receipts from Right to Buy sales could unlock additional resources for building new homes.
However, with increased local authority control over reinvested funds, landlords will need to carefully track compliance with reinvestment obligations and new Government guidelines.
For housing associations, it’s wise to revisit policies around tenant purchase schemes and make adjustments to account for the reduced discounts.
Ensure that your teams are clear on the compliance protocols tied to Right to Buy changes, especially where legal reporting and funding usage come into play.
Rent settlement
Social landlords will also benefit from a new five-year rent settlement, set at the Consumer Price Index (CPI) plus one per cent.
This brings some financial certainty, enabling more confident planning and resource allocation.
However, it also calls for an examination of your internal compliance systems, as rent increases will directly affect tenants and their ability to pay.
Properly structuring rent increases to align with the CPI framework and clearly communicating these changes to tenants will be essential to avoid disputes and stay within compliance limits.
Additionally, Labour has hinted at consulting on a potential ten-year settlement. Social landlords may, therefore, wish to engage with this consultation to push for the longer-term certainty needed to maintain compliance with sector standards while continuing to deliver affordable housing.
Homelessness prevention and Discretionary Housing Payments
The Budget’s £233 million allocated for homelessness prevention, alongside the extension of the Discretionary Housing Payments scheme, underscores the Government’s commitment to tackling rough sleeping and homelessness.
However, specific funding details are yet to be clarified, leaving many social landlords in a holding pattern.
Compliance requirements may change depending on how this funding is allocated, so stay updated on any announcements from local authorities.
If your association works with homelessness prevention schemes or Discretionary Housing Payments, be prepared to adjust your reporting and monitoring processes to align with new guidelines and maximise access to these funds.
Building safety funding and a focus on cladding and decarbonisation
The Government has committed an additional £1 billion to cladding removal, with social landlords expected to benefit from this much-needed focus on building safety.
While eligibility remains under review, there’s a chance that this funding could alleviate some of the financial burden of making housing stock compliant with post-Grenfell fire safety standards.
On the sustainability front, the £3.4 billion Warm Homes Plan aims to decarbonise housing stock, and social housing is expected to feature prominently.
The Budget will fund heat pumps and other energy-efficient upgrades to improve fuel poverty for thousands of homes, including up to 250,000 social homes.
As social landlords take up these opportunities, it’s crucial to ensure that compliance with energy-efficiency standards is maintained.
This will likely involve upgrading heating systems, insulation, and monitoring energy standards, so planning for compliance obligations is key.
HRA borrowing rate and funding for adaptations
The extension of the Housing Revenue Account (HRA) discount rate until 2026 offers local authorities an incentive to fund capital projects, making social housing development more accessible.
This, combined with an £86 million increase to the Disabled Facilities Grant, means that councils can invest in more accessible and adaptable housing, which benefits residents with social care needs.
As a social landlord, if your organisation partners with local councils or directly undertakes accessibility adaptations, you’ll need to follow updated compliance guidelines for managing HRA funds.
Additionally, adapting properties for accessibility often involves meeting specific design and safety standards, so consider how your teams will ensure compliance as they undertake these works.
Stamp Duty Land Tax (SDLT) reforms and implications for rental demand
Labour’s increase to the SDLT surcharge on second homes from three per cent to five per cent aims to give first-time buyers an advantage.
By reducing the profitability of buy-to-let investments, the Government is indirectly encouraging a shift towards affordable housing, as demand could rise for social housing as an alternative to private renting.
For you, this could mean an increase in tenant applications as private rental properties become less attractive due to higher acquisition costs.
However, be prepared for potential changes to eligibility criteria, tenant screening, and administrative compliance as your demand grows.
Ensure that you’re fully compliant with fair housing practices and that any internal procedures are updated to handle changes in applicant volume and eligibility requirements.
The Birketts view
While the Autumn Budget brought a few promising developments for social housing, it also heightens your compliance obligations across the board.
From rent adjustments to new Right to Buy conditions, social landlords must now be diligent in updating policies and systems to meet these new requirements.
Staying proactive and engaging with upcoming consultations could also be crucial to anticipate further regulatory shifts.
Remember that by prioritising compliance, you can be at the forefront of delivering safe, affordable, and accessible homes.
For help managing your compliance responsibilities, we highly recommend you speak with a solicitor who is well versed in social housing law.
We’ll be able to give you tailored guidance and advice based on the Government’s evolving policies and ensure you stay on top of the legal side of your business.
To get in touch, please give us a call on 0808 169 4320 or visit our contact page.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at November 2024.