Navigating the New Regulatory Landscape: Insights from Housing Sector Leaders

The Regulator of Social Housing’s new in-depth assessment  - revised and toughened-up this year - will sooner or later reach the sector’s landlords. So, what can they expected? Odgers Interim convened a webinar with some who’ve been through the process to find out.

The resulting consensus, Annaliese Rogers, principal in the housing sector, Odgers Interim, suggested was: “Prepare for the unexpected and prepare as much as possible” and “know your business and know your homes”.

Stephen Flounders, executive director, regulatory & business services at Gentoo, drew attention to the new wider focus of the regulator, going beyond traditional financial and governance judgments, to factors including anti-social behaviour, health and safety compliance and stock condition data.

He said: ‘The regulator wants to understand how well you know your customers, how well you know your homes, and how you tie all that together to deliver better outcomes.”

Mr Flounders added: “It's now becoming increasingly apparent that the regulator is looking at customer data, whether that's vulnerability data, demographics data, complaints data and repairs data, and expecting organisations to have as robust an approach to that type of data and information as they do about stock condition data.”

But governance could not be forgotten. He said: “Good governance and the economic standards and the viability criteria have not gone away.

“The regulator will still expect as much focus on governance, financial, risk management, and all the usual topics covered under the old IDA regime.”

Jane Porter, chief operating officer at Southern Housing - formed in December 2022 the merger of Optimal and Southern Housing Group - explained the latter was rated G2 for some issues around rents and compliance.

This rating was then applied to the merged entity, and “our primary objective was to be G1 because “if you're going to the bond market, if you're talking to other stakeholders, that G1 rating is absolutely key”.

She said the assessment was “not just about delivering great customer service, and it's not just about your governance structure, it’s the whole service they're looking at, so make sure you know your homes.”

And throughout this process, regulators looked “for assurance, not reassurance, so there's no point in saying, ‘we told the board this’,  that's not good enough, they want evidence”.

Ms Porter noted that, post-Grenfell, landlords in London in particular could expect to be questioned closely on building safety.

Overall, there was “a level of granularity of questioning that took some of us by surprise” such as being asked where Southern had influenced local authorities to deliver better outcomes for neighbourhoods.

Regulator’s demands were not limited to the existence of a policy but rather how it was implemented.

“It wasn't just that we'd approved an allocations policy, but ‘how do you know that you're letting your homes in accordance with your policy’”?

They also went deeper than before into service areas.”They don't want to see a single anti-social behaviour policy, they want things like hate crime and domestic abuse identified and reported on separately.”

Turning to how to plan for an assessment, Jenny Spoor, director of operations at Havebury Housing Partnership, said when a self-assessment identified a struggle to find evidence, Havebury had looked to internal audit.

She said: “We used a mix of members of the governance team pulling together the learning, but there wasn't a special team.

"It did take up quite a chunk of time, but you have a level of detail to do to know what we needed to do and what to provide.”

Mr Flounders said that where internal audit could not assist - such as with stock condition - “we appointed a third party to do that, asking them to do their own stock condition survey and cross referencing it with the surveys we'd carried out”.

Reflecting on the whole assessment, he said: “We didn't find the process as intense as we probably anticipated.

“We were able to use things such as our website, a 10 minute presentation at the start and the document request, to make the regulators’ job easy for them, get on the front foot, almost try to address some of the areas of focus without necessarily needing them to go through questions.”

Summing up, Ms Rogers said: “It's definitely coming through that the level of granularity is perhaps more than expected, and certainly more across the governance and the value for money ratings, and the points around the board and committees and how you weave that together definitely came across as well.”