Andrew Watson: Regulator meets with systemically important landlords

Andrew Watson: Regulator meets with systemically important landlords

Andrew Watson

Deputy chair Andrew Watson details the Scottish Housing Regulator’s latest meeting with systemically important landlords.

On 3 June 2024, we held the second of three meetings this year of the Systemically Important landlord group.

We refer to a small number of Registered Social Landlords (RSLs) as Systemically Important (SI) because of their stock size, turnover, or level of debt, or because of their significance within their area of operation.

This is one of the three groups of RSLs we meet with regularly to discuss important and topical issues in social housing in Scotland. We meet with these groups to help us understand the challenges faced by those we regulate.

The purpose of the session was to discuss the outcomes of the recently published risk assessment, and the review of the Annual Return on Charter (ARC) indicators.

The group noted the outcomes from our recent annual risk assessment, the levels of compliance with regulatory requirements including the Regulatory Standards, and our planned engagement for 2024/25. The Group also noted the key strategic themes emerging, including the challenges to RSLs’ financial health, homelessness, the continuing lack of clarity on net zero measures and the development of new homes.

Some members of the group expressed interest in learning more about the introduction of a triage process as part of the financial risk assessment. This allows SHR to identify those RSLs where we need explanations on specific areas earlier in the financial risk assessment process.

The group recognised the concerns around homelessness in Scotland, and there was a strong consensus around the importance of tackling the issue by continuing to work closely with local authorities to support those facing homelessness. Members noted their commitment to providing as many homes as possible to homeless people, but also noted they also face additional pressures to provide homes to others on their housing lists who are in need. Members re-emphasised the importance of sustained prevention work around homelessness.

Group members also spoke of the challenges of supporting some tenants to sustain their tenancy when they move into a new home. Members noted a growing requirement for wrap around support and the funding pressures that this placed upon them.

Several group members spoke about the declining number of new social homes being developed across the social housing sector, and noted the challenging political and economic environment which developing RSLs continue to operate in. This includes permanently higher costs, weakened supply chains, cuts to the housing and building standards budget alongside the announcement of a national housing emergency. Some also highlighted the importance of considering the wider changes to mid-market rent [eg rent controls], and private sector housing legislation which have also impacted upon the development of social housing.

The group noted our plans to refresh the development thematic this year, and agreed to consider development as a key area for discussion at the next SI forum in October.

The conversation then moved onto the review of the Annual Return on Charter (ARC) indicators.

The discussion from group members was focused primarily on tenant and resident safety (TRS), and in particular, damp and mould. There was a general consensus amongst members of the group that focusing upon the ‘big 6’ areas of tenant and resident safety (gas, electrical, water, fire, asbestos, and lift safety) appeared to be the correct approach with an additional measure for damp and mould However, some also noted the potential to detract from other TRS issues, of which there are many.

Members discussed the challenges associated with managing tenant and resident safety from a governance perspective. Members noted that it is important to ensure there are clear expectations around the issues that RSLs are required to manage. As part of our review of the Charter, some members further observed that we should continue to try and ensure that Boards are not overburdened with too much information.

Group members also noted that further opportunities will be available for feedback on the ARC review during the formal consultation launching later this year.

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