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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
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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
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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
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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?
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The social housing regulator
Don’t be fooled by short-term conditions
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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
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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
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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?
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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