Social Housing Speed Read: 2024 In Review
23rd January, 2025
In this week's Social Housing Speed Read, we reflect on two major developments from 2024 and how they might impact 2025 and beyond: the Autumn budget, which invested heavily into the housing sector, and the first set of published Tenant Satisfaction Measures (TSMs).
Autumn Budget: Investment in the Housing Sector
On 30 October 2024, the Labour government introduced their first budget in 14 years which aimed to kickstart a council housing revolution.
The social housing sector has long anticipated investment due to the shortage of social housing available. According to government figures, in the past ten years, there has been a total loss of 177,487 social homes (with social homes being sold or demolished).
To combat the shortage, the government set a target to build 1.5 million new homes over the next five years and has pledged for £5 billion to be invested over 2025.
Reduction in Right to Buy Discount
Housing leaders have long been calling for Right to Buy reform and their calls were finally answered in the Autumn Budget whereby tweaks were made to stem the net loss of council housing.
The Right to Buy scheme used to offer council tenants a reduction of up to 70% off the market value, allowing tenants to purchase their council home at a substantial discount. However, this has resulted in a depletion of council housing stock with for example only half of the properties sold under the scheme in 2023 being replaced.
To tackle the shortage of social housing, the government reduced the scheme’s discount to pre-2012 levels, alongside greater protections for newly-built social housing. The new measures were implemented on 21 November 2024 and the government projects that Right to Buy sales will drop by 1,700 per year. Local authorities are now able to keep 100% of the receipts generated by a Right to Buy sale and no longer have to return a percentage to the Treasury. The impact of this change could save local authorities nearly £1.2bn by 2030 (according to analysis by the Treasury). By allowing local authorities to keep the money from purchases under the scheme, money can be reinvested into the social housing sector, enabling councils to scale-up the delivery of social housing.
Although there has been some criticism from prospective buyers who review the reduction in discount as unfair, it is hoped that these measures will have a wider positive impact by bridging the gap in supply and demand of social housing.
Social Rents
In October 2024, the government launched a consultation on the future of rent policy for social landlords. The Chancellor proposed a new social rent policy allowing social landlords to increase their rents up to Consumer Price Index (CPI) plus 1% per year, for five years, from 2026-27 to 2030-31.
Housing organisations submitted their responses to the government’s proposal and the final policy is expected to be announced around the Spring Spending review in March 2025.
Social housing providers are eagerly awaiting the outcome of the consultation as social rents (set by the government) make up the bulk of social landlords’ income. The Chartered Institute of Housing has expressed that the proposal “will not go far enough to provide the stability required” and instead advocates for a 10-year rent settlement to provide social landlords more certainty on funding.
When considering the future of social rent, a careful balance must be struck. The government must consider the needs of social landlords; raising rent will help facilitate landlords to build and improve their existing stock. However, raising social rent does come at a cost to tenants and the Treasury (due to higher benefit spending). How the government will balance these issues remains to be seen in the upcoming Spring Spending review.
Removal of Cladding
The budget allocated £1 billion to be spent on the removal of dangerous cladding, implementing the recommendations of the Grenfell Inquiry’s final report. As of September 2024, only 29% of buildings identified with unsafe cladding had completed remediation works, therefore this investment is aimed to speed up the remediation of affected buildings.
Affordable Homes Programme
An additional £500 million was allocated to the Affordable Homes Programme starting from 2025. This additional funding is to go towards building 5,000 affordable homes (which consists of a mix of rental and ownership properties).
Planning Investment
To tackle the demand for housing, the government committed £46 million to go towards the recruitment and training of 300 graduates and apprentices in local planning authorities. By increasing personnel, the government aims to make the workload of local authorities more streamlined, making the building of new homes more effective.
Tenant Satisfaction
The year of 2024 saw the first set of TSMs being published by the Regulator of Social Housing.
The data was collected from 0.5 million tenants who answered twelve ‘tenant perception questions’. Landlords also answered ten ‘management information’ questions relating to repairs, complaints and anti-social behaviour. Social landlords were required to collect and publish their TSMs results.
The TSMs results highlighted that the biggest area for social housing providers to improve is complaints-handling. Despite 70% of social housing renters reporting to be satisfied overall, 66% of them were dissatisfied with the way complaints were handled. Consequently, the Regulator of Social Housing suggested that social housing providers need to understand why their tenants reported dissatisfaction and identify ways to improve services.
National Tenant Survey
Significantly, the National Tenant Survey commissioned by the Regulator of Social Housing mirrored the trends of the TSMs. Despite 70% of tenants in low-cost rental accommodation reporting that they were satisfied with the service provided by their landlord, tenants allude to issues with landlords taking too long to resolve complaints.
59% of tenant complaints were in relation to repair and maintenance, with tenants expressing dissatisfaction regarding the length of time landlords took to deal with damp and mould as well as issues relating to plumping and heating. When tenants were asked how landlords could improve the complaint-handling process, they said improving communication and responding quicker.
Areas for Improvement
The Regulator of Social Housing has suggested ways in which landlords’ can improve complaints-handling. It is advised for landlords to avoid an informal complaints process as complaints are often under-reported this way.
Where complaints are particularly complex, enhanced oversight is wise. To improve efficiency, social housing providers could commission a review into whether tasks are being completed and examine any system or internal communication issues. This could act as a preventative measure to prevent complaints being raised and avoid escalations.
If you have any questions about anything discussed in this speed read, do not hesitate to contact one of our expert Social Housing lawyers.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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