Discussion: Unfolding Functions of Commercial Registered Service Providers
In the latest issue of CT Brief - Issue 71, the focus is on for-profit registered providers (FPRPs) and their role in England's social housing sector.
Anthony Fomin and Umit Yildirim are associated with the article's images, capturing the faces behind these providers.
The primary challenge in promoting collaboration between for-profits and non-profits is recognizing their shared purpose: to provide affordable social housing.
FPRPs are a growing presence in the landscape of social housing supply in England. By the end of 2024, FPRPs are estimated to own over 40,000 homes, with more than a quarter being general needs homes.
However, their overall impact and influence on the social housing supply crisis is nuanced and less documented compared to non-profit and local authority providers.
The Regulator of Social Housing (RSH) maintains a register of social housing providers in England, including local authorities, non-profit organizations, and for-profit registered providers. For-profit providers are a smaller segment within this register.
Most new registrations of social housing providers are non-profit or local authority bodies, suggesting the majority of social housing supply efforts still come from the non-profit or public sectors.
For-profit registered providers fall under the same regulatory regime overseen by RSH. This regulation includes annual reporting requirements, regulatory judgements, and compliance with safety and supply standards. RSH actively monitors and regulates all provider types to ensure delivery of social housing and compliance with standards.
Despite their contributions, available documentation does not provide detailed evidence of a transformative or dominant impact by for-profit providers on alleviating the social housing supply crisis in England. The crisis is broadly attributed to chronic under-supply, rising demand, and funding constraints, areas usually addressed primarily by local authorities and housing associations.
There is limited direct public data or analysis explicitly measuring how for-profit providers have influenced the crisis. Most policy discussions and reports focus on the roles of councils and housing associations, with for-profit providers remaining a smaller and less examined component.
The Housing and Regeneration Act 2008 in England allowed the creation of a class of for-profit registered providers (FPRPs) to help address housing supply problems. Some FPRPs are among the biggest developers of social housing in England, with Legal & General Affordable Homes and Octopus (through their NewArch RP) being notable examples.
The importance of collaboration between for-profit providers, local authorities, and other housing associations is highlighted for the long-term maintenance and quality of homes. As FPRPs grow, they will have increasing exposure to regulation and non-profit housing associations, becoming progressively more integrated into the social housing sector.
Regulators are treading cautiously due to concerns about profit-making and different funding models, but are reassured by entities that understand regulation and the sector's ethos. Motivations can differ between FPRPs and non-profits, with some FPRPs focusing on a steady, guaranteed income stream.
Campbell Tickell's work with for-profit providers includes new registrations, regulatory advice, forming partnerships, and recruiting executives. They are developing a code of governance for FPRPs that recognizes their distinct nature while demonstrating a commitment to high standards and good governance.
The for-profit housing sector is becoming more professionalized, with stricter registration criteria and a diverse range of players. Key takeaways from the second joint event held by Campbell Tickell, Trowers & Hamlins, Devonshires, and Social for for-profit providers included the importance of sustainability in social housing's contribution to the 'S' in ESG for investors.
Investing more in building sustainable homes to reduce maintenance costs in the long run is crucial. The growing acceptance of the role of FPRPs, accompanied by an understanding from them of the importance of partnership working and a willingness to engage with councils long-term, is a promising development for the future of social housing in England.
- For-profit registered providers (FPRPs) are anticipated to own over 40,000 homes by the end of 2024, with more than a quarter being general needs homes, expanding their presence in England's social housing sector.
- Despite the growing prominence of FPRPs, their overall impact on the social housing supply crisis is less documented compared to non-profit and local authority providers, with most policy discussions focusing predominantly on councils and housing associations.
- The importance of collaboration between for-profit providers, local authorities, and other housing associations is emphasized for the long-term maintenance and quality of homes, as FPRPs become more integrated into the social housing sector.
- Sustainability is an essential factor for investors in social housing, and investing more in building sustainable homes to reduce maintenance costs in the long run is crucial, a key takeaway from a joint event for for-profit providers.
