For-profits boost stock by 52 per cent as shared ownership acquisitions grow

In total, registered providers own 4.4 million units of social stock, of which private registered providers (PRPs) own 2.8 million and local authorities own 1.6 million. The amount of stock rose by 0.7 per cent. This was driven by an increase of 23,349 affordable rent homes and a 18,168-unit rise in shared ownership properties.  

Six private registered providers own 50,000 or more units of social stock each.

Since 2016, the RSH said there had been a shift towards stock being concentrated with larger providers due to “consolidation” activity. The sector has seen a wave of mergers of late as organisations seek to tackle the current economic challenges.

Both private and local authority providers increased the number of shared ownership stock they own, with a combined total of over 18,000 more units owned across the sector in 2022 than in the previous year.

This is equivalent to an eight per cent rise and was driven by private registered providers’ increase of 17,801 units.

Private registered providers built and purchased more homes in 2022, as activity recovered towards pre-pandemic levels following the ending of COVID-19 restrictions, the RSH said. 

There has been an overall rise in their low-cost rental stock since April 2021, with more than 20,000 homes for affordable rent being added.

Most (83 per cent, or 3.68 million units) of the social housing sector is general needs, with supported housing at 11 per cent and shared ownership at five per cent.

Proportionally more local authority-owned stock is general needs (93 per cent) than private RP-owned stock (78 per cent).

Rents

Average weekly net rents for general needs social rent homes in England rose by 1.6 per cent from 2021 to 2022, in line with the limit set for the 2021-22 financial year.

Meanwhile, supported housing (social rent) average weekly net rents increased by 1.7 per cent.

Rents were lowest in the North East of England (£78.89) and highest in London (£116.16).

For private registered providers, average weekly net rent for general needs social rent stock (excluding affordable rent and intermediate rent) rose by 1.5 per cent.

The average net rent for supported housing increased by up to two per cent. And the average gross rent for affordable rent general needs units was £136.72 per week in 2022, an increase of 2.6 per cent on the previous year.

Meanwhile, for local authorities, average general needs (social rent) weekly net rents increased by 2.9 per cent, while supported housing (social rent) weekly net rents rose by 2.3 per cent.

Under the current rent settlement, RPs are permitted to increase rents by Consumer Price Index plus one per cent, but with inflation at 10.1 per cent, the government has consulted on a temporary tighter rent cap for the sector for the 2023-24 financial year.

Options of three, five and seven per cent were put forward and trade bodies have highlighted seven per cent as their preferred option. In September, the RSH told providers that it is “essential” to prepare for a government-imposed rent cap now.

RPs are now awaiting the government’s decision to find out what to set their rents at next year.  

Social housing providers have urged new prime minister Rishi Sunak to make “quick decisions” to give them clarity in working out their business plans.

Evictions

Evictions in the year totalled 3,940, but this was still a long way below a pre-COVID figure of 10,311 seen in 2020. The government introduced a moratorium on evictions after the pandemic took hold, which led to a sharp drop. 

In the most recent year, tenants being in rent arrears was the most common reason for an eviction, which follows a long-term pattern. 

Last week, the RSH warned in its annual Sector Risk Profile that RPs are facing “difficult decisions” to maintain their financial resilience, and current pressures could cut their ability to cope with more shocks.