20 January, 2016
In a bid to cut the housing benefit bill, George Osborne announced in the 2015 budget that there will be a 1% cut to annual social housing rent, starting in April 2016.
As a result of this, many social landlords are seeking to fully understand their legal obligations in relation to carrying out repairs to their housing stock, before they reduce costs to cope with the 1% rent cut. Many housing associations have been seeking clarification on the repairs they have to carry out to avoid claims and regulatory action, with a view to saving costs whilst still ensuring they maintain the requisite legal standard.
As well as reviewing their legal obligations, associations are seeking specific advice about the repairs that tenants can be asked to do themselves.
Further, associations have been reviewing their repairs policies and procedures to ensure that they reduce the risk of disrepair claims and the costs associated with them.
Alistair McIntosh, chief executive of consultants Housing Quality Network, said landlords are talking to surveyors and consultants as well as law firms as they prepare for a significant drop in revenue.
According to the Homes and Communities Agency's global accounts for 2013/14, the sector generated a turnover of £13.1bn from social housing lettings. A 1% reduction in rent would therefore reduce social rental income by around £130m.
We at Forbes are now advising RPs in relation to their minimum repairing obligations, including tenancy agreement reviews and advising on repairs policy and repairs procedures.
Steve Cole, policy leader at National Housing Federation, does not believe there will be a general drop in standards. He said: "They [landlords] might be looking at how they could hold off on replacing certain elements in order to deliver more important and more beneficial repairs." He said the rent cut will make it harder for landlords to hit current asset management targets.
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