NHF Warn Limiting Non-Social Housing could be Restrictive
The National Housing Federation (NHF) have warned that limiting non-social housing activity could be restrictive to the sector.
The Homes and Communities Agency (HCA) have published an approach that suggests social housing be carried out in a ‘discrete corporate entity’ with non-social housing activity limited to between 2.5-5% of turnover.
Measures to limit non-social housing activity carried out on the main balance sheet of associations risk being unduly restrictive, the National Housing Federation has warned.
The NHF will raise concerns about the HCA’s approach in its submission to a consultation on changes to its new regulatory framework in England.
The HCA’s discussion paper suggests social housing be carried out in a ‘discrete corporate entity’ with non-social housing activity limited to between 2.5-5% of turnover.
John Bryant, policy leader at the NHF, said the suggested approach is a ‘classic example’ of the regulator not distinguishing between rigid rules required to prevent for-profit providers using social assets to boost profits and more flexible rules needed to help providers manage risk.
A hybrid approach is needed, the regulator needs to make sure the regulation is suitable for each type of organisation.
The Council of Mortgage Lenders warned the rules could lead to default on loans if landlords have to return to a set level of non-social housing activity on their balance sheet.
However, it said ‘ring-fencing’ measures ‘should be capable of effectively protecting social housing assets’.
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