For-profits are not the answer to social housing crisis, NHF boss says

‘Immoral’ exclusion from the Building Safety Fund

Ms Henderson also renewed a call for government to give social landlords equal access to the Building Safety Fund (BSF) and the Cladding Safety Scheme (CSS).

She branded the current rules that exclude social landlords from accessing these funds as “immoral and unfair”.  

The BSF, which opened in 2020 and was adapted and reopened in 2022, aims at providing funding to fix fire safety problems with external cladding for buildings 18 metres-plus.

Meanwhile, the CSS, which was announced in November 2022 and opened for applications in July 2023, is aimed at funding the cost of addressing life safety fire risks associated with cladding on residential buildings over 11 metres tall.

“The safety of residents is the absolute top priority and must be,” Ms Henderson said.

“The previous government took the decision that meant that social landlords could not access the Building Safety Fund and the Cladding Safety Scheme in the same way as private building owners.

“Private building owners have received 90 per cent of the government funding available for remedial works to buildings of 11 metres plus, so there’s almost no public funding available for works to flats where social tenants live.

“Our position on this is that it is immoral and unfair, and diverting social tenants’ rents away from investing in repairs, maintenance and new supply is wrong.

“We are working very constructively with the new government on the acceleration plan, but what we would like to see come forward is equal access to the Building Safety Fund and the Cladding Safety Scheme, so that we are on a level playing field with private building owners.”

The National Audit Office has estimated that social landlords face a bill of around £3.8bn to fix cladding, while the NHF estimates that remediation of all defects would cost around £6bn.

“This issue goes to the heart of the government being able to deliver its 1.5 million homes target,” she said.

“And I think also many of those organisations which are severely impacted by the building safety crisis are in areas of acute housing need, particularly London and the South East. Our top priority is fair and equal access to the Building Safety Fund.”

Long-term rent settlement and rent convergence

Ms Henderson also voiced the NHF’s desire for a long-term 10-year rent settlement of the Consumer Price Index (CPI) plus one per cent and rent convergence.

In its consultation, the government has proposed a new rent settlement permitting annual rent increases of CPI plus one per cent that would be in place for “at least” five years.

In addition, housing secretary Angela Rayner revealed at the Social Housing Annual Conference in November that she was pushing the Cabinet for rent convergence, among a range of measures needed to deliver her housebuilding target.

Ms Henderson said the NHF’s modelling shows that rent convergence would unlock “at least an additional 92,000 homes over the next decade compared to current projections”, by raising an additional £3.5bn for housing associations by 2035.

Speaking at the same session, Fiona Fletcher-Smith, group chief executive of L&Q and chair of the G15, also called for a long-term rent settlement and rent convergence as well as access to the BSF.

She said that rent convergence and a 10-year settlement would be worth £221m for London providers and access to the BSF would be worth about £460m for L&Q alone.

“If the government wants us to be part of the 1.5 million new homes, and we desperately do want to be part of that, something else is going to have to come in to enable us to cross-subsidy,” Ms Fletcher-Smith said. 

“And two of the things we’re asking for are around rents, the rent settlement and the rent convergence. And then around access to things like the Building Safety Fund for social rented homes, so that we can take that money that we are spending in that area and put it into new builds.”

Affordable Homes Programme

While welcoming the £500m top-up to the existing 2021 to 2026 Affordable Homes Programme (AHP) in the Budget, Ms Henderson said that the sector “really” needs a new programme that is “ambitious and meets the scale of the challenge”.

“We’d like [it] to have a very strong focus on social rents in there as part of that, but also on regeneration, placemaking and the mix, so including things like shared ownership as well,” Ms Henderson said.

The government has previously promised that a new successor AHP will be revealed in the Spending Review in spring next year and has also vowed to unveil a housing strategy alongside this.

Ms Henderson said that the housing strategy should be for the long term of 10, 20 or 30 years, and that the NHF would also like it to be focused on new supply and existing homes and communities.

She also asked the government for a longer-term revenue settlement for housing-related support for supported housing.