The social housing regulator
Successful places with homes and jobs
A NATIONAL AGENCYWORKING LOCALLY
Sector risk and future regulatory requirements
Matthew BailesDirector of Regulation, HCA
The social housing regulator
What are we worried about?
Loss of social housing assets
Most egregious failure = insolvency…and lenders enforcing security
But managed loss of “public value” owing to poor management / commercial losses also a problem
The social housing regulator
Why?
Insolvency / re-possession would be a game changer
Tenants would lose protections
Taxpayer might lose grant
Credit risk would increase
Image of sector would be changed
The social housing regulator
What’s changing
Gone: 30 year money from banks
Gone: 50% plus grant rates
Going: Welfare underwriting rents in full
The future: complex choices for Boards
Opportunities and risks
A more cyclical model?
The social housing regulator
Don’t be fooled by short-term conditions
The social housing regulator
Key risks – sector risk profile Interest rates / re-financing
Sales
Income / welfare
Cash flow
Complex finance / covenants
Commercial exposures
FRS102
Weak governance
The social housing regulator
What are we doing? Framework changes
from April 2015
Staff / structure changes…with more capacity to come
Different operating model – deeper dive, less often
Swift, decisive, transparent action on non-compliance
The social housing regulator
What should you be doing? Stress-testing…
And establishing appropriate controls
Challenging yourself on skills
Focussing on risk flows
Basic questions:
– What’s the most we can lose?
– How do we know?
The social housing regulator
Final thought
Don’t despair!
We are not against risk, we are against undue risk and weak controls
A well-run social housing provider should not get into serious difficulties