Social Housing (Regulation) Act 2023

Housing

With social housing being the residence for 17% of households in England[1] it is unsurprising that its regulation is a matter of almost constant review. Andy Lane gives a broad overview of the latest product of such review, the Social Housing (Regulation) Act 2023 (“the 2023 Act”).

Context

Social housing is of course regulated both in terms of statutory oversight, and more regular and systemic superintendence. To give one historic example, Part 1 of the Housing Act 1964 introduced the Housing Corporation to fund and regulate housing associations in England.

More recently, Part 2 of the Housing and Regeneration Act 2008 (“the 2008 Act”), which sets out the objectives of the regulator to this day[2], abolished the Housing Corporation and created a new social housing regulator, the Office for Tenants and Social Landlords (“TSA”).[3]  The TSA’s responsibilities passed to the Homes and Communities Agency (“HCA”) in 2012.

Then to bring matters right up to date, the Regulator of Social Housing (the social housing regulator in England)[4] and Homes England (the land and investment agency)[5] were created in 2018 and are the “successors”[6] to the HCA.

Time for (further) changes

The 2023 Act came out of the post-(2017) Grenfell Tower fire discussions, and began its pre-legislative life with the August 2018 Green Paper, “A new deal for social housing”, and the subsequent call for evidence.

The later White Paper – the charter for social housing residents – wasn’t however produced until November 2020, and the Parliamentary process then only commenced, in the House of Lords, on 8 June 2022. Later in its journey, on 9 February 2023, amendments were made to the Bill to introduce “Awaab’s Law” following on from the tragic death[7] of 2-year-old Awaab Ishak on 21 December 2020.

Prior to the royal assent on 20 July 2023, there had also been the Levelling Up, Housing and Communities Committee (LUHC) inquiry to examine the quality and regulation of social housing in England.

Finally for this section, it is worth recording that in October last year the Housing Ombudsman noted that serious failings or delays by social housing landlords had almost quadrupled in the previous year.

What does the 2023 Act do?

The Explanatory Notes to the 2023 Act gives a helpful overview to its purpose:[8]

“The Social Housing (Regulation) Act (the Act) facilitates a new, proactive approach to regulating social housing landlords on consumer issues such as safety, transparency, standards and conduct of staff and tenant engagement, with new enforcement powers to tackle failing landlords. The intent of this Act is to reform the regulatory regime to drive significant change in landlord behaviour to focus on the needs of their tenants and ensure landlords are held to account for their performance.

The Act has three core objectives:

• To facilitate a new, proactive consumer regulation regime;
• To refine the existing economic regulatory regime; and
• To strengthen the Regulator of Social Housing’s (the regulator) powers to enforce the consumer and economic regimes.

The Act also strengthens the powers of the Housing Ombudsman and enables requirements to be set for social landlords to address hazards such as damp and mould within a fixed time period.”

The following 7 sections then give some specific examples of the 2023 Act reforms.

1. Regulator of Social Housing[9] (sections 1-5)

The 2023 Act strengthens the Regulator (through amendments to the 2008 Act) by giving it new enforcement powers ensuring they can effectively intervene when required. The measures seek to encourage landlords to maintain standards, to avoid the threat of enforcement action, and ensure that the Regulator has the appropriate tools available to deal with non-compliance with the standards. For example:

• The fundamental objectives of (consumer) regulation[10] are amended to require registered providers to be transparent with their tenants.
• The Regulator is required to establish a panel of persons called the Advisory Panel.[11]
• There is greater statutory encouragement – i.e., section 100H of the 2008 Act inserted by section 5 of the 2023 Act – of a good working relationship between the Regulator and the Housing Ombudsman.

Private registered providers, such as housing associations, already have inspections. For local authorities, this will be a new regime. It is hoped that regular inspections will function as a deterrent to bad practice.

The new consumer standards come into effect from April 2024, when it will also start the regular inspection programme of larger landlords (i.e., 1000+ homes). The Regulator launched a 10-week consultation on its (section 215) statutory guidance in light of regulation powers it is being granted under the 2023 Act in November 2023,[12] and separately on consumer standards.

2. Registration (sections 6-9)

The most significant change[13] is that from 20 September 2023 the Regulator has been able to make the registration of private registered providers conditional upon their ability to meet, on registration, regulatory standards to be found at sections 193, 194, 194A and 194C [14]of the 2008 Act (and de-register for breach)[15].

3. Duties (sections 10-11)

Registered providers will be required from a date yet to be appointed to designate an individual – a health and safety lead – to carry out functions relating to their compliance with their health and safety obligations towards tenants.[16]

Where a tenant’s safety is threatened, social landlords will have a duty to offer them alternative accommodation on equal terms to their existing tenancy. For example, where a tenant is the victim of domestic abuse.

Also, section 122 of the Housing and Planning Act 2016 has been amended by section 11 of the 2023 Act to extend the power to enable the Secretary of State to, by regulations, impose duties on local authority landlords in England, rather than just private landlords and private registered providers, to ensure that electrical safety standards are met during any period when the premises are occupied under a tenancy.

4. Standards (sections 21-27)

By means of the insertion of section 194A into the 2008 Act, standards may now be set by the Regulator concerning the competence of individuals “involved in the provision of services in connection with the management of social housing”, including the holding or working towards management qualifications[17] of senior housing executives and managers (this is in addition to the previous (4) consumer standards which remain).

Section 198B grounds for the use of the Regulator’s monitoring and enforcement powers following a breach, or a risk of a breach, of the economic standards will be removed at some stage by means of section 26 of the 2023 Act and replaced, where necessary, by appropriate tailored grounds for each of the powers. These tailored grounds are set out in Schedule 3.

Section 26 will also remove the section 198A ‘serious detriment’ test presently applied to allow for Regulator intervention and exercise of its powers in respect of the consumer standards.  This, obviously, will widen the Regulator’s ability to intervene on grounds of breach or potential breach of the consumer standards.

Schedule 3, paragraph 5 of the 2023 Act will amend the 2008 Act to allow the Regulator to issue penalties to all types of registered providers, including local authorities, whilst paragraph 6 removes the £5,000 cap, so the Regulator has the potential to issue penalties of an unlimited amount.

5. Monitoring (sections 28-36)

The Regulator has a power to direct registered providers to collect, process and publish information concerning their performance in relation to the Regulator’s standards. The regulator can apply these directions to all registered providers or only to specified cases, circumstances, or registered providers.

This includes the proposed amendment to the 2008 Act[18] to be brought in by section 31 which will enable the Regulator to require a registered provider to prepare and implement a performance improvement plan, provided they are satisfied that specific grounds have been met, including:

• There has been a failure to meet a standard under section 193, 194, 194A or 194C of the 2008 Act; or
• There is a risk that if action is not taken by the regulator there will be such a breach; or
• The registered provider has failed to comply with directions or a request under section 198C; or the interests of the tenants require protection; or
• There has been a breach by the landlord of a section 125 undertaking.

Other new powers included, at section 32, will enable the Regulator at some point in the future to arrange for an authorised person to enter a registered provider’s social housing premises to take emergency[19] remedial action (i.e., works which are regarded by the authorised person as immediately necessary to remove the imminent risk of harm). Such power may only be exercised where specific conditions have been met.

6. Housing Ombudsman (sections 40-41)

This Ombudsman has long been able to recommend that a landlord review a particular policy or practice to prevent any service failure, but the 2023 Act has gone further at section 40 by amendments to Schedule 2 of the Housing Act 1996 (social rented sector: housing complaints) now in force which enable the service to order and not just recommend such action.

We have already seen in recent times a more proactive approach by the Ombudsman and this change, along with the power to issue guidance as to good practice in the carrying out of housing activities to be found in section 41,[20] will enable it to go beyond the individual complaint in issue and address the problem from a wider perspective.

The updated remedies guidance can be found here and  a factsheet to explain the role of the Regulator of Social Housing and Housing Ombudsman Service is here.

7. Awaab’s law (section 42)

Section 42 of the 2023 Act, in force from the 20 September 2023, introduces an implied terms as to the remedying of hazards at section 10A of the Landlord and Tenant Act 1985.

The Secretary of State must set out new requirements for landlords to address hazards such as damp and mould (though extending beyond a broader range of hazards than ‘just’ damp and mould) within a fixed period. Awaab’s Law, introduced in the 2023 Act, requires landlords to investigate and fix reported health hazards within specified timeframes.

On 9 January 2024, the Department for Levelling Up, Housing and Communities introduced a consultation to set those times. The new rules will form part of a tenancy agreement, so that tenants can hold landlords to account by law if they fail to provide a decent home. The consultation closes at 11.59pm on 5 March 2024.

Conclusion

This is a brief overview of the changes brought in or proposed to be brought in by the 2023 Act.  I have had the benefit of some excellent resources alongside the 2023 Act’s Explanatory Notes and DLUHC’s papers, such as the Commons Library Note on the Progress of the Bill as it then was in February 2023, and the “essential guide” to the 2023 Act produced by Trowers & Hamlins.

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[1] Population and household estimates, England and Wales: Census 2021, unrounded data.

[2] As amended most recently by the 2023 Act.

[3] The operating name was Tenant Services Authority. Their responsibilities passed to the Homes and Communities Agency in 2012 by means of section 178 of the Localism Act 2011.

[4] The Legislative Reform (Regulator of Social Housing) (England) Order 2018 made the Regulator a standalone body separate from the HCA and transferred its regulation function to the Regulator.

[5] Replacing the HCA on 1 December 2018, which itself had been established by the 2008 Act.

[6] Homes England is the trading name for the HCA, a non-departmental public body and statutory corporation created by the 2008 Act. It is the responsibility of, and sponsored by, the Department for Levelling Up, Housing and Communities.

[7] Of a respiratory condition caused by prolonged exposure to extensive mould in the one-bedroom social housing flat where he lived.

[8] Paragraphs 1 to 3 of the Explanatory Notes.

[9] The Regulator launched a consultation on proposed changes to its fee principles in September 2023. Subject to consultation outcomes and Secretary of State approval and the amendments to the fee charging powers (set out under section 4 of the 2023 Act) coming into force, the proposed changes will apply from 1 July 2024.

[10] See section 92K of the 2008 Act.

[11] Section 2 of the 2023 Act by way of the insertion of a section 96A into the 2008 Act.  This is separate to the Social Housing Quality Resident Panel, made up of social housing residents, which has been meeting since November 2022 and directly sharing their views with ministers and the government on driving up the quality of social housing.

[12] Which ran until 16 January 2024.

[13] Section 7 to the 2023 Act amending section 112 of the 2008 Act.

[14] Sections 194A (Standards relating to competence and conduct) and 194C (Standards relating to information and transparency) introduced by sections 21 and 22 of the 2023 Act respectively.

[15] Section 9 of the 2023 Act amending section 118 of the 2008 Act to this end.

[16] See section 126A and 126B of the 2008 Act inserted by section 10 of the 2023 Act).

[17] The nature of such qualifications being defined at 194A(6) and (7) of the 2008 Act and differentiating between senior housing executives and senior housing managers (terms themselves defined at section 194B).

[18] Sections 218A to 218D of the 2008 Act.

[19] The Regulator only anticipates using this power in exceptional circumstances where the health and safety of tenants is at imminent or serious risk.

[20] By way of the insertion of a new section 51ZA of the Housing Act 1996.

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