Written evidence submitted by Ms Gillian Perceval [FSS 056]

My associated organisation is Anchor Hanover. I have an interest in putting forward the case and issues of Shared Ownership within an Extra Care facility managed in Partnership with SBC. I am related to a deceased resident who had 14 years of first-hand experience of being a resident within a Social Housing Development run initially by Hanover Housing with a merger with Anchor Trust in 2018, I therefore feel my contribution is valid.

The current state of financial resilience of social housing providers:

1. How would you assess the financial resilience of the social housing sector currently? Are increasing pressures and requirements putting financial viability at risk?

Displaced core values of what Social Housing should be about is putting the financial viability   of the sector at risk. Large Housing Associations have directed their vision into development of more housing, often on the pretence of supplying 'Affordable/Social Housing' then changing the criteria, as not financially viable and not able to deliver. There seems to be no risk to the Housing Associations, they are making huge amounts and reaping Government Grant's, where is the accountability of this money if we are still in such great need for Social Housing.

2. What pressure has high inflation, increased energy costs and any other additional costs placed on the finances of social housing providers?

The has been obvious pressure from all these elements on everyone and all companies. But Housing Associations just seem to be looking at the next way to sustain their monopoly over Social Housing, trying to reinforce that they are doing a good job but actually their growth in size has left large pockets of poorly managed, or empty accommodation.

3. To what extent can social housing providers maintain output levels in housing development to provide a counter cyclical balance in otherwise tightening market conditions?

Housing Associations need to stop being developers, focus on decent homes standards and reasonable/actual charges for services with guaranteed buy back of leases.

4. What impact have changes in the housing market in recent years had on the strength of housing associations’ balance sheets?

Huge changes with massive surplus. With a growing elderly population, efforts have been placed on Shared Ownership Leasehold Properties. Again, often under the pretence of bringing 'Affordable' but not delivering in reality.

5. Does the cross-subsidy model, by which market housing helps pay for social and affordable housing, have any continuing viability?

Does this in reality actually happen. It may be agreed at planning but then is often withdrawn once properties are developed.

6. To what extent have private equity investors, and in particular international investors, been entering the sector? What challenges does this present?

There is no vested interest apart from profit in achieving social housing. Even large 'not for profit' organisations such as Anchor have released a Sustainability Bond in July of 21. 'Centrus acted as sole financial advisor to Anchor Hanover, supporting the development of the refinancing strategy as well as its structuring and implementation. The main underwriters were Barclays, NAB, MUFG and Santander'. Is this what Social Housing and Not for Profit Companies is now about. There has to be conflict of interest in their core values. They are now accountable to international investors. How much is it costing to run as a corporate institution. Is that where surplus is going?

New challenges to the social housing sector:

1. The Secretary of State has specified that more resources need to be directed towards maintaining and improving the existing stock. How feasible is this for social housing providers?

Make it feasible. Insist on a percentage going towards maintaining and improving existing stock and not development. Separate them out. It seems that now is the time to take housing stock back into Council Ownership/control where more stringent standards can be applied. There has to be a fairer way. It is the tenants and residents that are suffering with disrepair and excessive service charges. Those that could afford to buy a percentage share of a property are then trapped. Resale market is non-existent. So many are then weighted down with service charges on empty properties that cannot sell. It should all be managed in a more efficient, fair way.

2. How do social housing providers choose whether to undertake new development or to focus on maintenance and upkeep of existing stock? Is it currently possible to achieve both objectives?
• Where social housing providers are undertaking new developments, what consideration has been given to the types of homes they are building? For example, houses versus flats?

They have a choice, but it seems to all be focused on where there is money. If not from Government Grant’s, then the big new buzz words are Integrated Community Care. Housing Associations will be building with care facilities/services being part of a wider package. Even promoting equity release in order to pay for care in later life. There has to be an agreement to buy back leases.

3. What issues does the requirement on Housing Associations to carrying out building safety present?

It can be missed. It is open to corruption. It is open to inconsistent standards. Not professional.

4. Has the lifting of the cap on the Housing Revenue Account made a difference to supply or improved housing from Local Authorities?

                No comment.

5. Have for-profit Housing Associations made the sector, as a whole, more financially robust?

They have brought in competition and capitalism which contradicts what social housing is about and a fair system. However, one good aspect of ‘for profit’ Housing Associations is that they have to submit accounts which are more publicly accessible and therefore more transparent. All Housing Associations should be accountable to Freedom of Information requests.

6. Traditionally, struggling Housing Associations have merged with stronger, sometimes complementary, Housing Associations. Will this continue to be possible?
• To what extent can mergers result in the creation of an umbrella group too large to discharge its duties and responsibilities to its tenants?

As previously written, Housing Associations are too large and are losing their core values. They still maintain them as a vision or mission statements but are not fulfilling them.

Hollow words. Small Associations care more. From my experience for 8 years under Hanover Housing they had core values which they adhered to. Tenants were looked after; their needs were met, and properties were well maintained. With the merger with Anchor Trust, it became different, it was about a corporate look, where the tenants were not happy. They had to start fighting for what they wanted in order to have a voice in what was being imposed on them.

7. Has the emergence of partnership working between councils and housing associations in local areas made the sector more resilient? What encouragement has the Department given to such partnerships?
• To what extent do local authorities and Housing Associations collaborate when considering development plans for housing locally?

In my experience this has not worked well. There may be agreements/partnerships on paper, but this is not seen in practice. In fact, it allows for huge voids to appear, not only in empty properties but in agreed policy decisions. Neither side taking full responsibility.

In a development of 70, 4 flats cannot sell, and I believe 8 are for rented and are not being used. Why? It makes it difficult to find accountability. 

8. The Affordable Homes Programme includes a high proportion of shared ownership properties. To what extent is this form of tenure desirable for potential purchasers and for social housing providers?

This tenure is wrong and misleading. It is not shared ownership; it is part owning with full responsibility for services and more. How is it right or fair that service charges are paid on an empty, 75% shared ownership property which can't sell and with the owner in a self-funded nursing care home. Trapped with no way out. The owner is now deceased and yet there is still a liability. It's a disgraceful injustice which Government have allowed, even encouraged to manifest.

9. What contribution have council owned housing companies made to increasing social housing supply?
• Is the collapse of Brick by Brick – wholly owned by the London Borough of Croydon – a one off or the tip of the iceberg?

No comment.

10. Will the introduction of the Infrastructure Levy and changes to section 106 significantly affect the capacity to develop affordable housing?

Only if it is enforced. Recently with the case in Devon the Developer was allowed to alter and reduce their commitment to affordable due to financial viability pressures.

What are the policy and regulatory challenges to the Department and the Regulator?

1. Is the current Departmental policy on social housing and affordable homes appropriately focused?

Even if focused how are wrongs then enforced. The processes to justice are a long and winding road.

2. Is Homes England being directed appropriately by the Department, and is it achieving its objectives?

No comment.

3. Has any evaluation been undertaken of the impact of the additionality guidance on the supply of social housing?

No comment.

4. Is the current range of grant funding available appropriate to address the issues and challenges that the social housing sector faces?

No, give allowances for buying back leases. Councils can do this, why can’t Housing Associations?

5. On our inquiry into Exempt Accommodation, we found that issues have arisen when providers are not registered with the Regulator. How does the Regulator of Social Housing engage with Housing Associations whose registration is voluntary?

No comment.

6. Does the Regulator of Social Housing have sufficient power to ensure that mergers result in a financially viable new organisation?

Its what happens down the line. It may appear viable but there seems to be a five year consolidation period before cracks surface and excessive charges creep in.

7. Does the Regulator of Social Housing have adequate powers to ensure:
• value for money; and
• low risk

                       from new sources of finance such as private equity?

What about value for money and low risk for tenants and residents, not just monetary value but in terms of living in peace without the need to fight for fairness.

1. Does the Regulator of Social Housing have the resources and skills necessary to regulate the increasingly complex financial and corporate structures proliferating in the social housing sector?

I would suggest not. Housing Associations can pay £000's for financial experience/advice to find the best solutions to sustain their structures and maintain massive unseen surpluses.

2. How appropriate is the existing regime in respect of regulating for-profit housing associations?

No comment.

3. It is already accepted that the numbers of dwellings likely to be produced under the 2021 Affordable Homes Programme will be less than initially forecast. Will the financial challenges that the sector faces reduce these numbers even further?

Look at existing stock as well as development. In one area alone I name 14 empty flats in good state of repair, either for shared ownership or rental, why can they not be sold or be utilised.

Stop listening to Housing Associations alone that believe they have the answer to this dilemma. Listen to the residents and tenants that are experiencing the financial implications of badly conceived/managed social housing development. Housing Associations have a vested interest in maintaining or increasing their strong hold. It is unfair and an injustice.

May 2023