Company Secretary Snapshot - April 2025

Written by Sarah Monaghan, Rose Klemperer and Renee Tombs

Introduction

This month, we cover the important housing-related announcements made by the Chancellor in the Spring Statement and various updates from the Regulator of Social Housing (RSH), particularly in relation to the lease-based provision of specialised supported housing. In addition, we look at the latest RSH regulatory gradings, some emerging solutions for RPs in relation to the Tri Fire EWS1s and some key learning from the Housing Ombudsman’s report into damp and mould inspections.

Housing in the Spring Statement 2025

On Wednesday 26 March, the Chancellor Rachel Reeves, presented the Spring Statement alongside the latest economic forecast from the Office for Budget Responsibility. Key announcements in relation to housing included:

• An additional £2 billion will be invested into grant funding for social and affordable housing in 2026‑27 which is expected to deliver up to 18,000 new social and affordable homes. All projects funded through this £2 billion will need to start by March 2027, and will need to finish by June 2029.
• The additional funding was announced as a “bridge” to the Government’s new affordable homes programme, which is expected to be announced in June’s Spending Review.  
• The additional £2 billion will be supported by a £625 million package of skills measures to address large-scale skills shortages in the construction sector, which the Government says it needs to deliver its ambitious plans to build 1.5 million homes over the next Parliament.
• The Chancellor highlighted the impact of the planning reforms under the Planning and Infrastructure Bill which aims to streamline planning decisions and remove obstacles particularly for Local Authorities.
• The Government also announced that it will publish a Long‑Term Housing Strategy and confirm the location of major new towns later in the year.
• An additional £20 million has been allocated to support community groups, such as community land trusts and housing co-operatives, in building affordable homes. 

The measures collectively aim to accelerate housing delivery and support the Government’s aim to build 1.5 million new homes. The sector has offered a mixed response to the announced measures; however, overall, the Spring Statement’s announcements were acknowledged as positive steps noting that they represent only an initial response to the scale of the challenges facing the sector. It is anticipated that a more comprehensive and long-term plan will be detailed in the Spending Review in June 2025 with much of the sector in a ‘holding pattern’ until then…watch this space! 

RSH publishes focus report on Specialised Supported Housing

The RSH issued a focus report on the lease-based provision of Specialised Supported Housing (SSH) on 10 April. The report follows on from previous publications by the RSH regarding the delivery of this type of housing, most notably the addendum to the RSH’s 2018 Sector Risk Profile. 

The lease-based model of SSH has come under scrutiny by the RSH, particularly the governance and financial arrangements of some SSH RPs that lease all or most of their housing stock from other organisations, typically private investors. 

In this month’s focus report, the RSH highlighted a number of issues with this model and said it remains concerned that very few SSH landlords are delivering in a way that “consistently delivers the outcomes required by the regulatory standards”. The RSH highlighted the principal reason for this is that there is insufficient flexibility in current structures to manage risk – particularly viability risk – effectively and independently. In some cases, there is also a lack of good governance and willingness to made changes. Key issues raised in the report include:  

• Lease issues: in this type of model, a freeholder (or superior landlord) usually leases property to the RP on a long-term lease with terms that oblige the RP to take responsibility for repairing and insuring the property. The RSH considers that there is often an uneven sharing of risk between the RP and the freeholder, and in some cases, the arrangement puts too much risk on the RP. The RSH refers to specific risks around void periods, lease payments, lack of break clauses or unilateral break/put options in favour of the freeholder.
• Rent exemptions: properties that meet the definition of SSH qualify for a rent exemption under the Rent Standard. However, there were numerous cases where RPs could not evidence that the homes or tenancies met the SSH rent exemption requirements, and yet were relying on the SSH rent exemption.
• Lack of skills and experience: many boards and executives did not have appropriate skills, and risk management was weak or “non-existent”. The RSH identified a lack of understanding of the scale of lease liabilities, a poor investment appraisal process and a lack of willingness or ability to challenge contractual arrangements to improve the RP’s position.
• Cashflow issues: the RSH noted that many SSH RPs have minimal capital compared to their long-term liabilities and hold little cash, which creates cashflow shortfalls that need to be managed. Most of the RPs’ income then goes on meeting lease payments to the freeholder but the RSH expects that RPs should independently be able to maintain their financial viability under a range of circumstances while meeting their contractual commitments and maintaining standards for tenants. If the SSH RP gets into financial difficulties, the range of actions it can take to maintain its viability is more limited and based on its ability to persuade a freeholder to amend the terms of its lease.
• Dependence on local authority and care providers: SSH providers are highly dependent on local authority and care providers for their ongoing sustainability and are more generally vulnerable to changes in government policy and the wider economic environment.
• Conflicts of interest: the RSH identified numerous instances where there have been conflicts of interest between the freeholder and the RP which have not been managed appropriately, resulting in the RP taking on unfavourable lease terms, partially occupied developments, and unsuitable homes.

Following the report, the RSH also published an enforcement notice for Pivotal Housing Association on 16 April. Pivotal is a lease-based provider of SSH and the RSH stated that it failed to ensure it has access to sufficient liquidity and can manage significant risks to its viability both in the short and longer term. The RSH noted that Pivotal is exposed to significant financial risks due to the type of lease structures it has entered into. The enforcement notice requires Pivotal to commission an independent review and develop a clear action plan for agreement with the RSH.   

Regulatory grades 

The RSH’s publication of regulatory judgements continues this month. Recent key themes include: 

• Safety and Quality Standard: many RPs received C1 gradings, but there are still weaknesses in the delivery of outcomes of the consumer standards. For one RP, progress is required in the delivery of the remainder of its programme of physical inspections to fill remaining gaps in understanding the condition of its homes including on decent homes standard compliance.  
• Health & Safety: improvement is needed in reporting arrangements regarding the level of detail for remedial actions. 

The key takeaway is that improvements should continue, with a proactive approach being taken to meeting the outcomes of standards. G1 is the aim to ensure delivery of more and better homes, improved services to tenants and robust finances. 

The V2 viability grade has now reached a record high with 63% of the sector now graded V2. The RSH has reiterated its previous comments that, whilst V2 is the ‘new normal’, this should be read against the governance ‘G’ grading, with a G2, V2 organisation having a lot of work to do. 

Spotlight on consumer standards in recent regulatory grades  

It’s now been 12 months since  the RSH  introduced a new regime of consumer standards for RPs (including local authorities), designed to drive long-term improvements in the sector. 

From the judgements published so far, key themes of importance for the RSH in relation to the consumer standards include data on homes (such as having up-to-date stock condition surveys) and residents, tenant engagement and safety compliance. A variety of grades have been issued since the new regime was implemented, but many non-compliant RPs (i.e. those which received C3 or C4 grades) did not meet requirements in these areas. 

In the most recent set of inspections last month, five of the six landlords who were given consumer gradings received a C1 (the top grade). Of these, Places for People became one of the first large RPs to receive a C1 grading. It is notable that all of these RPs who received a C1 were private RPs, and many local authority landlords have received lower grades in relation to the consumer standards so far. Despite the gradings, the RSH noted that “even landlords which receive the highest gradings still have room for improvement.” 

Tri Fire EWS1s – emerging solutions for RP borrowers and funders

One of the current challenges widely discussed at the recent NHF Housing Finance Conference was the consequential impact on loan security valuations and asset cover ratios resulting from the now discredited EWS1 certificates issued by Tri Fire’s Adam Kiziak to RP borrowers, notably a number of G15 associations. 

We know that hundreds of EWS1 certificates have been assessed by Tri Fire, although the extent of fraudulent certificates and underlying malpractice is not yet fully known, hence the understandable caution by lenders in understanding the emerging risk and ramifications. The sector has moved quickly to tackle the issue. Whilst valuation and funding requirements on the issue are not crystallised with absolute certainty and there is still some investigation required to understand the implications for those RPs affected, the bottom line from hearing from various valuers and funders is that EWS1s issued by Tri Fire are unlikely to be relied on by valuers and lenders for the purposes of new charging in the absence of strong supporting evidence of building safety compliance. 

This therefore leaves RPs asking what the position is with their currently charged security signed off by Tri Fire and what their options are going forwards.  

The first step is to talk to your funders and valuers and provide as much granular information as possible to determine how many units are affected, how many units are in charge and with which lenders. Working backwards, a nil valuation could be applied given the negative impact on the marketability of such units. However, this is not necessarily a terminal diagnosis and could potentially be viewed as more of an interim “withholding of value” until satisfactory evidence of compliance can be produced in the form of a new replacement certificate, although the shortage of fire engineers in the market may mean a delay.  

A nil valuation may not necessarily be an issue for RPs with sufficient headroom within over secured facilities, although this may be materially adverse in terms of the impact on asset cover ratios and compliance with loan covenants in a counter scenario. In some circumstances where there is a proportionately small number of units affected within a facility, it may also be possible to persuade an amenable funder to accept the current security valuation and wait for the existing EWS1 to be replaced given the certificates expire after a period of 5 years.  In a more critical scenario where a borrower RP risks being in breach of its loan covenants, a funder may accept substitute security but this may have a transactional cost with new due diligence and certificates of title required. It is therefore important affected RPs are “security ready” with quick access to clean substitute security to cater for curveballs in the form of Tri Fire. As ever, early engagement and having open conversations is key, especially where RPs have a revaluation on the horizon including security assessed by Tri Fire. The positive news is that there is discernible focus amongst sector stakeholders on finding a range of flexible solutions to address this issue.

If your organisation is affected by this issue and you would like to discuss further, please contact Jess Church or Katie Dyer. 

Housing Ombudsman: Damp and Mould

The Housing Ombudsman has recently published a report on damp and mould inspections. The report offers insights for UK housing providers, especially in anticipation of Awaab’s Law being implemented in October 2025. The report  focused on four common failings involving landlord handling damp and mould inspections: 

1. Failing to do an inspection, or the inspection being limited or incomplete.
2. Multiple or conflicting inspections, without the outcomes being reconciled.
3. Disconnects between the inspector’s recommendations and the landlord’s proposed works.
4. Poorly communicated inspection results, where residents often chase for any information, even if it is vague.

Key learning from the report includes: 

• Timely and effective inspections: inspections should be carried out as soon as possible after an issue is reported, with recommendations followed up and actioned and the position communicated to the resident and the landlord. A record should be kept, to ensure clear expectations. While reasonable for the landlord to trust the advice of their expert surveyors, if there is a dispute about this from the resident, it may be fair to commission an independent surveyor to ascertain if the same conclusions are met. If an inspection is arranged and cancelled or missed, a new appointment should be scheduled as soon as reasonably possible and communicated to the resident. 
• Effective knowledge and information management: landlords’ systems should enable them to keep accurate, robust and accessible records of key data, including repair reports, responses, inspections, and investigations. This enables landlords to inspect and raise works correctly, reducing the need for clarifications or delays in works being progressed and supports a risk-based approach. Repair logs are a vital source of intelligence for landlords, showing a clear activity plan of what has been achieved, as are clear records of any vulnerabilities within the household. 
• Looking ahead to Awaab’s Law: Awaab’s Law will mean stricter obligations for RPs in relation to record keeping and timescales for resolving complaints. Landlords have a limited window to enhance processes, focussing on inspection protocols, record-keeping and communication strategies to ensure compliance.  

Update to Rent Standard Guidance

The RSH has published updated guidance on annual rent increases for RPs, effective from April 2025. The guidance operates alongside the 2020 Rent Standard. 

The update follows December 2024's publication of limits on annual rent increases for 2025-2026. The updates include adjusted tables for calculating permitted rent increases and maintain provisions for exemption applications from private registered providers.

---

AOB 

Articles you might find interesting

• Inequalities for children in poor housing

Forthcoming events

Senior Independent Director Network – 6 May – Virtual 

Is your SID part of our network? If not, please email Rose Klemperer for more information.  

REGISTER

Housing Management Update – 14 May – Virtual 

In the rapidly evolving landscape of UK housing, it is essential for all Housing Management professionals to stay ahead of key issues and hot topics. Between new legislation being introduced and increasing regulatory pressures, the impact of these developments will be felt across the sector.

Join us for this session where we will be discussing topics including: 

• Renters Rights Act – post enactment
• The new Crime and Policing Bill – what next for ASB?
• Engaging with residents and complaints
• Disrepair and Awaab’s Law

REGISTER