RSH plans to increase fees for providers as it seeks to recoup costs from additional regulation

The consultation is running for eight weeks, finishing on 31 October 2023.  

Fiona MacGregor, chief executive of the RSH, said: “Our stronger regulatory remit will empower tenants and help us to hold social landlords to account. We need to make sure we have the resources to deliver this expanded remit, building on our regulation of landlords’ governance and viability.”

“That is why we’re proposing changes to our fee principles, and we encourage landlords, tenants and others in the sector to respond to this consultation.”

Annual fees

The annual fees an RP pays will continue to be calculated by reference to the number of social housing homes it owns, the same approach the regulator has adopted since fee charging was introduced in 2017.

The RSH has proposed increasing the fees for larger providers – those with more than 1,000 homes – from £5.40 per unit in 2022-23 to an estimate of £9 to £10 going forward for these RPs when it is fully staffed.

This reflects the estimate of the proportion of its overall costs attributable to private RPs, minus any income from small private RP fees and initial registration application fees, the regulator added.

The RSH has proposed that large local authority RPs – those with 1,000 homes or more – will start paying an annual fee. This will be an annual fee to recoup the share of its costs attributable to local authorities and will be calculated on the basis of the number of social housing units they have.

It is in response to the government’s requirements on funding and because councils will be included in the new programme of regulatory inspections. 

It estimated that once fully staffed, this fee will be £7 to £8 per social housing unit.

However, the regulator will be building up staffing incrementally and costs may not meet this level in the first year of charging. Any unspent fees will be rebated, it added.

The relevant per-unit fee rates for large local authority RPs will be calculated annually.

The regulator proposed that a fixed fee should apply to all providers owning fewer than 1,000 units.

These providers are subject to a different level of regulatory engagement, reflecting the RSH’s risk-based proportionate approach, to large providers.

They send the regulator data returns and are subject to a variety of financial health checks on a proactive basis and reactive regulatory engagement where required, but do not undertake in-depth assessments, stability checks or quarterly surveys.

The RSH has proposed to apply a fixed annual fee of £600 to £700 to small private RPs, a rise from the current £300. This is the first increase in this fee since 2017 and contributes to the cost of economic and consumer regulation of these providers.

Small local authority RPs will not face a fee as the regulator’s engagement with them will be very limited for the foreseeable future and it is therefore likely that administering a small fee to these providers would be “uneconomical”.

There are 55 of these small local authority registered providers, which collectively own 2,100 social housing units.

The RSH said that for groups owning 1,000 social housing units or more where the parent is a private RP, the annual fee should be set at group level rather than for each individual entity on the register.

In addition, when a provider registers or de-registers, it must continue to pay the full cost of the annual fee for the year that it is on the register, the RSH added.

Initial registration application fees

The regulator has proposed to charge RPs at the point of application, rather than on registration. It said this recognises that there is a cost to the RSH to consider an application regardless of whether it is successful or not and will help focus applicants on the importance of preparedness.

The RSH currently charges a £2,500 fee on initial entry to the register with all remaining costs of registration met by government grant. It said where a preliminary application for registration is submitted before 1 July 2024, it intends that this existing regime will apply.

The regulator has now proposed to charge an application fee of £3,000. In accordance with the regulator’s two-stage registration process, this would be payable in two parts, a preliminary application fee of £500 and a detailed application fee of £2,500 for those that progress to this stage.

The application fee would be payable by those seeking initial registration by the regulator as a provider or intending provider of social housing. It will not be payable by local authorities that are subject to compulsory registration.

The amount of the registration fee will be reviewed periodically.

The regulator has also proposed to expand its fees and resources advisory panel to include local authority representatives and said it would publish information annually on its costs and fees.

Impact on RPs

The RSH said that in developing its proposals it has considered the impact on current and potential future RPs and applicants for registration.

The regulator said in its consultation: “We have sought to avoid the risk that fees create a barrier to entry to the sector, or a reason for exit, recognising the value of a regulated sector that is able to meet a range of needs.

“In particular, we have given due consideration to avoiding situations where the fees charged to small providers may have unintended consequences on viability for those providers.”

This comes after the RSH published its implementation plan for new consumer regulation in January. This included recruiting more staff and increasing fees.