Standards and trade-offs

Originally written as a column for Inside Housing.

Can social landlords improve their existing homes at the same time as they deliver ‘the biggest boost to social and affordable housing in a generation’?

The answer is that they will have to but a select committee report published on Monday lays bare the scale of the task ahead and the trade-offs that will have to be made.

As landlords are only too aware, the next ten years will see implementation of Awaab’s Law (phased introduction between 2025 and 2027), Minimum Energy Efficiency Standards (by 2030) and the revised Decent Homes Standard (by 2035). 

Add continuing work on building safety and they face a massive programme of work on existing homes that will have to be balanced against bids to build new ones under the Social and Affordable Homes Programme (SAHP). 

Monday’s report from the Housing, Communities and Local Government (HCLG) Committee lays out a ‘challenging backdrop’ of rising costs and a shortage of skills. 

The all-party committee concludes that: ‘Even with the government’s investment in social homes and changes to the rent settlement, we are concerned that the sector will not have sufficient resources to effectively meet the government’s new social homes target while also raising standards.’

This could also lead to landlords selling off stock that has reached the end of its intended lifespan, say the MPs, ‘at a time when social housing is desperately needed’.

All of which leaves a series of trade-offs balancing three different interests: of existing tenants who rightly want improvements as quickly as possible; of social landlords acutely aware of their finances who say they need time and flexibility; and of families stuck in temporary accommodation or on waiting lists who are desperate for a social home.

The original Decent Homes Programme (not just a standard) was announced in 2000 with a target that all social housing should meet it by 2010.

There were interim milestone targets to reduce the number of non-decent homes by a third by 2004, 45-50 per cent by 2006 and 65-70 per cent by 2008. 

As the MPs point out: ‘Even with these interim targets, a substantial proportion of homes failed to meet the minimum standard when the programme ended. The then government estimated that it would take almost another decade to bring all social homes up to the minimum standard.’

However, the report says that improvement work has ground to a halt since the pandemic and cites estimates in the latest English Housing Survey that 10 per cent of the stock (430,000 homes) fails that original standard. 

In a flurry of announcements last week, the government mapped out what comes next: rent convergence added to a long-term rent settlement plus phased implementation and flexibility in the new standards. 

The MPs say that the ‘long implementation period…eases the burden on providers, but fails to deliver improvements with the urgency that social tenants deserve. Too many tenants will remain in  poor quality, unsafe homes for too long under the implementation date that the government has set. There is also a risk that too many homes may fail to meet the revised Decent Homes Standard by the final implementation date.’

They recommend that there should be interim targets that specify the percentage of homes to be upgraded in each year before the final implementation date. 

And they say that there is ‘a strong case for the government to establish a new, modern Decent Homes Programme that supports social landlords to raise the standard of social homes’.

There should also be  ‘a single quality framework or strategy’ that aligns regulatory requirements, plus a pooled fund that brings together existing funding for improvements to social homes and gives providers more flexibility and local partnerships to address skills and supply chain constraints. 

As things stand, there is a clear risk that all this will impact on the supply of new social homes, with housing associations and local authorities warning that the new standards could divert resources and reduce development activity. 

The MPs heard that the costs of complying with the new standards could absorb much of the additional rental income and rebuilt financial capacity given to landlords. ‘New homes, by contrast, are a discretionary spend,’ they point out. 

Even if we take pleas for more funding with a pinch of salt, there are also clear risks that existing social homes could be lost if social landlords deem it not commercially viable to bring them up to the new standards. 

Losses could come via sales or demolitions of existing homes so it will be important to look at the net stock of social housing. Grant is available for regeneration projects that demonstrate net additionality by building new homes as well as replacing existing ones but it remains to be seen how this will work out in the balance between market, affordable and social rent homes. 

A look back at what happened under the original Decent Homes Programme illustrates the potential trade-offs here. 

Official statistics show that 125,000 social homes were demolished between 2000/01 and 2009/10 during the original Decent Homes Programme, an average of 12,500 a year. 

Demolitions in the first four years of the 2020s totalled just under 14,000 and averaged around 3,500 a year. 

This implies that the difference between ‘normal’ demolitions and those influenced by the need to meet the standard totalled 9,000 a year.

A repeat of that sort of increase would mean 90,000 existing social homes being demolished over the next ten years – half of the 180,000 new homes for social rent promised over the same period under the SAHP. 

How to balance improvements to existing homes with the need for new ones will be the key question facing landlords over the next ten years but it is too important to be left to them alone to answer. As the MPs argue, the long-promised housing strategy must put in place a long-term approach.  



Leave a comment