Social Housing Speed Read – A forecast for the housing sector in 2018

Review of 2017

Looking back at 2017, a number of prominent events stood out for the housing sector:

• The Housing White paper “fixing our broken housing market” outlined the Government’s plans to reform the housing market and boost the supply of new homes in England.
• The General Election which gave the UK its sixth housing minister, Alok Sharma MP, since 2010 following Gavin Barwell losing his seat.
• The supported housing U-turn in which the Government proposed a new ‘three pronged’ funding model for sheltered, transitional and long term supported housing from April 2020.
• The catastrophic event of the Grenfell Tower fire drawing into focus product specification, health and safety and building regulation, management of social housing and the inadequacies of the local authorities in rehousing the victims of the fire.
• The Autumn budget providing, amongst other things, an investment of £44bn into housebuilding over the next 5 years, a target of 300,000 new homes to be built a year until 2020 and a lift on borrowing caps for councils.
• Government plans to abandon capping housing benefit for social housing tenants at the Local Housing Allowance (LHA).

What is the forecast for 2018?

The following key points are what we expect to look out for during 2018:

Government papers
The Government is continuing to work on a Social Housing Green Paper. The paper will focus on the safety and quality of social housing, the management of social homes, tenants’ rights and complaints handling procedures. In addition this, the Green Paper is expected to consider how the sector can contribute to the Government’s economy boosting strategies.

The Government are conducting a nationwide ‘Social Tenant Engagement Questionnaire’ to obtain information on tenant’s views on social housing. The responses will feed into the policy paper and views can be submitted via the following link.

Homelessness
The Homelessness Reduction Act (HRA) is due to come into force in April of this year. The HRA will place duties on local authorities to try and help prevent homelessness by intervening at the earlier stages and some authorities will be under a duty to refer who may be homeless, or vulnerable to being homeless, to a housing authority. There is £72m available to help authorities implement the HRA with a further £3m being provided to bodies to update their data systems in order to monitor how the HRA is affecting homelessness in their district.

Changes to the GDPR
Changes to the General Data Protection Regulation (GDPR) come into force on 25 May 2018. The main changes regulate more stringently how organisations manage, store and handle ‘personal information’. Day to day work for social landlords and housing associations involves dealing with personal information. Organisations must move to compliance by 25 May 2018.

A snapshot of the property market
Over the past 12 months, house prices have risen 2.5%. Savills and Jones Lang LaSalle (JLL) predict a 1% rise in 2018 whereas Countrywide predict a 2% rise. A 3.1% increase is predicted next year by the Independent Office for Budget Responsibility based on first time buyers benefiting from the changes to SDLT whilst a 1.6% decrease has been forecast by Morgan Stanley. The supply of new build homes to rent has increased and as a result, JLL predict no more than 2% increase in rents for 2018.

With the uncertainty of the Brexit negotiations and as always the possibility of unforeseen events (such as Grenfell) that tend to shape the landscape, it is always difficult to predict with any certainty what will happen this year. As ever, horizon scanning, preparation, and risk management will be crucial to deal with whatever 2018 presents.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.