Midlands housing associations give thumbs up to govt reforms
Rent convergence, a social housing taskforce, Section 106 changes, a low-interest loan system, and minimum energy efficiency standards were the major headlines behind the Ministry of Housing, Communities, and Local Government’s announcement yesterday.
The news builds upon MHCLG’s commitment in July to deliver 300,000 affordable homes by 2036. Of those 300,000; 180,000 are to be for social rent.
The government’s announcements in brief:
- Rent convergence – a highly anticipated policy that will allow registered providers to increase weekly rent for social rent properties that are below the ‘formula’ rent level. RPs will be permitted to add up to £1 onto weekly rents each year from 1 April 2027 and then £2 from 1 April 2028 until formula rent is reached
- Time-limited approach being introduced for uncontracted Section 106 units, enabling them to be swapped to a different tenure should no registered provider want to purchase them
- Improved guidance for S106 homes, including clear rules regarding quality and a push for standardisation on pricing
- Dropping of Housing Revenue Account requirement for councils building less than 1,000 homes – previously you had to create and operate an HRA if you built more than 200
- £2.5bn to be made available through low-interest loans. Of these, 60% will be allocated to London, with the rest of the country bidding for the remaining 40%. Up to 10% of these loans will be available for purchasing S106 homes.
- Decent Homes Standard has been updated for the first time in 20 years to prioritise safety, warmth, and energy efficiency – with special attention paid to addressing damp and mould
- Minimum energy efficiency standards that will require social landlords to upgrade homes to achieve an EPC rating of C by 2030
The announcement was welcomed by housing associations in the Midlands, with Graeme Anderson, chief executive of Bromsgrove District Housing Trust, pleased that the government had noted the importance of improving existing social housing.
The group manages around 4,000 homes in the West Midlands.
“In areas like Bromsgrove, where demand for affordable housing continues to grow and many homes are older and harder to heat, investment that supports both new supply and higher standards is particularly important. Measures to tackle damp, mould and poor insulation, alongside a stronger Decent Homes Standard, have the potential to make a real difference to residents’ health, wellbeing and energy bills,” he said.
“It will be important to understand the detail of the proposals — including how funding, loan arrangements and support to unlock stalled Section 106 homes will work on the ground — to ensure they are practical and deliverable for local providers.
“bdht is committed to investing in our existing homes while continuing to work with partners to deliver new affordable housing that meets local need. We look forward to working constructively with Government to ensure these reforms support long-term investment and deliver lasting benefits for our communities.”
Meanwhile Coventry-based Orbit, which owns or manages around 46,000 affordable homes in the Midlands, East and South East of England, said the announcements would provide social housing groups with “long-term clarity”.
“Whilst we will need time to digest the detail, we appreciate the clarity provided, which will enable us to more effectively plan our strategic investments in our existing homes, alongside our commitment to supporting the Government in achieving its ambition to build 1.5m new homes,” said Phil Andrew, group chief executive.
“We must continue to work together and keep up the momentum needed to make an impactful difference in tackling the UK’s housing crisis, and we at Orbit are firmly committed to actively playing our part.”
