Regulator of Social Housing considering requiring registered providers to appraise their development capacity and deliver against housebuilding targets

The Regulator of Social Housing (RSH) is considering asking registered providers to publish an appraisal of their development capacity and set a target for building social homes.

The RSH, in a discussion paper today said when developing their business plans, “all social landlords should be considering how they can deliver more social housing to meet the needs of those waiting for homes”.

It said: “We are considering asking each private registered provider landlord to publish an appraisal of their capacity and capability for development and, where they can develop, to set themselves a target for the number of social homes they will develop over a suitable period.

“We could then hold them to account for appraising their development capacity and capability, setting sensible targets based on that appraisal, and delivery against their own targets. This could include publishing comparable information about [the] landlord’s development capacity and capability, and their performance in delivering more social homes.”

RSH said it is interested in views from the sector about whether these appraisals alongside targets would help the social housing sector to create more homes. It is asking for feedback on how it should scrutinise landlords’ plans to assess how well homes are being delivered.

The idea is one of many outlined by RSH in a discussion document today called More and Better Homes, outlining ideas for overhauling the regulator’s economic standards, which cover governance and financial viability. The document is intended to gather ideas from the sector ahead of a consultation on revised standards next year.

RSH argues its economic regulation needs to “keep pace with the sector’s growth, diversification and complexity – balancing support with managing new and emerging risks.”

It also said it is considering introducing a new requirement to ensure that social housing is at the “centre” of social landlords’ businesses.

The rule could take the form of specifying a proportion of a landlord’s assets or turnover relate to social housing.

The RSH said that in its experiences “organisations where social housing is too peripheral are more likely to want or need to make decisions that prioritise other objectives that are not in the best interests of current tenants, people on waiting lists, or wider society”.

RSH is also asking for views on how it could ensure landlords have enough independence and autonomy to protect tenants while still allowing new models to allow supply to flourish.

It said it is seeking views on whether asking large landlords to carry out a specific set of “stress tests and flexes” and publishing the results alongside mitigation plans would help landlords manage financial resilience. It is also asking for opinion on ways it could identify and “challenge landlords’ efficiency and effectiveness more strongly”, such as using sophisticated data analysis.

It said it could require landlords to explain how disposal decisions contribute to continued provision of social housing over the long-term.

The document said: “This [the new approach] could see RSH look to strengthen accountability and outcomes by setting clearer expectations, using better data to target risks early, and taking a more focused, adaptive regulatory approach that drives efficiency, resilience, and long-term protection of social housing.”

The document comes weeks after housing secretary Steve Reed wrote to new RSH chief executive Jonathan Walters urging him to consider what more the regulatory system can do to boost affordable housing delivery.

The RSH is inviting feedback to the paper before 30 September. A formal consultation on revised economic standards will follow next year.

Walters said: “Our focus is simple: a more efficient, financially resilient social housing sector – and a modern regulator that drives it.

“We want landlords who invest for the long term, improve safety and quality, manage risk, and deliver more and better homes for current and future tenants.

“We are inviting a sector-wide conversation on the challenges ahead and how regulation can better support the delivery of more and better social homes for the future.”

RSH has separately commissioned an evaluation of changes to its consumer standards, which are used to assess how landlords manage their homes and provide services to tenants.