28/02/2025
Written by Renee Tombs, Freddie Sedgwick, and Sarah Monaghan
Introduction
Welcome back to our Company Secretary Snapshot. This month, we bring you February’s roundup of key developments in the housing sector.
Perhaps the biggest news this month was the Government’s announcement that Awaab’s Law will come into force from October 2025. Our article looks at the detail and timetable for the changes to help social housing landlords prepare for them.
February’s edition also covers a number of other important updates for the sector including: an update on the consultation on proposed changes to Community Benefit Society law and insights from recent regulatory judgements and the English Housing Survey. We also highlight a recent High Court decision on direct payments to landlords from Universal Credit and a reminder regarding some of the upcoming changes being introduced by the Economic Crime and Corporate Transparency Act 2023.
Awaab’s Law coming – are you ready?
On 6 February 2025, the Government confirmed Awaab’s Law will come into force from October 2025, requiring social landlords to investigate and fix dangerous homes. Awaab’s Law will be introduced by the Government in a phased approach with the aim of ensuring it is implemented as effectively as possible.
Social housing landlords are expected to start considering the changes being implemented by Awaab’s Law without delay. Our article explores the detail and timetable for the changes in depth and recommends the immediate initial steps registered providers (RPs) should be taking to get ready for implementation.
If you are a registered provider of social housing and would like further help and guidance, please contact Sarah Orchard or Louise Mansfield.
Law Commission consultation on co-operative and community benefit society law – update
In September 2024, the Law Commission (the Commission) consulted on several significant proposals that, if enacted, could reshape the regulatory landscape for RPs registered as Community Benefit Societies (CBSs) and have substantial consequences for them. Our October 2024 snapshot discussed the key proposed changes, but two important proposals were:
- New definition for CBS membership requirements: one of the most impactful proposals was a statutory requirement for CBSs to implement voluntary and open membership, ensuring that anyone can join with a “one-member, one-vote” rule. Any move in this direction would likely prompt housing providers to reassess their current governance structures, which often feature closed memberships limited to board members.
- Loss of exempt charity status: another notable proposal would revoke the “exempt charity” status for charitable CBSs, obligating them to register with and be regulated directly by the Charity Commission. This shift would subject CBSs to the full scope of the Charities Act, bringing additional oversight and stricter requirements, especially around property disposals and governance practices.
The sector responded to the consultation in December 2024 and Bevan Brittan submitted our response to the consultation. In January 2025, the Law Commission circulated an update to key stakeholders which reflects the project team’s evolved views following robust responses to the consultation from the sector. Based on consultation responses:
- on the proposal to implement open membership, the Commission said that housing association feedback (which highlighted why many housing associations have moved away from open membership) was “persuasive” and there would “be no requirement for voluntary membership open to all.”
- one of the most significant updates is the recognition that registered social housing providers should not automatically lose their exempt charity status. On the proposal for CBSs to lose their exempt charity status and register with the Charity Commission, the Commission summarised the sector’s feedback (which highlighted that RPs are already heavily regulated and pointed out issues with regulation by the Charity Commission) and stated that “registered housing associations should continue to remain exempt” because they are “well regulated with bespoke processes befitting their specialised context.”
This update represents the Law Commission’s project team’s current thinking and the final recommendations are yet to be published. However, it is encouraging to see that sector concerns are being listened to and key proposals have been reconsidered to better reflect the realities of housing providers and we look forward to hearing the Commission’s thinking on other proposals set out in the consultation. In the meantime, if you would like a copy of our response to the Commission, please contact Rose Klemperer.
Regulatory Grades
Recent updates from the Regulator of Social Housing (RSH) include:
Consumer gradings
The RSH investigated Portsmouth City Council following information provided in its fire safety remediation survey return. The RSH issued the Council with a non-compliant C3 grading due to safety and maintenance problems including:
- Over 1,000 outstanding fire safety issues
- 85%+ of homes lacking recent electrical safety tests
- Less than 40% of homes surveyed in the last 5 years
- Nearly 10% of homes had no survey records at all
The RSH emphasised that the health and safety of tenants is “non-negotiable” and accurate, up-to-date data is necessary for proper service delivery.
Stability checks
The RSH also published a further 12 judgements through its stability check programme, with two RPs regraded from V1 to V2 and the rest retaining their viability and governance gradings. Key themes are that boards must:
- have a continued focus on governance arrangements and a clear strategic focus with oversight of activities and plans
- have a good grasp on an organisation’s risk management and control framework
- set a clear strategic direction and focus on hearing tenants’ voices
- actively seek and gain an appropriate level of assurance across a range of areas and use this to make continuous improvements across its landlord services, maintaining and improving homes, meeting building safety requirements and providing new homes.
English Housing Survey 2023 to 2024: headline findings on housing quality and energy efficiency
The English Housing Survey (the ongoing national survey which collects information about people's housing circumstances and the condition and energy efficiency of housing in England) has published its latest findings on housing quality and energy efficiency for 2023-4.
Overall, the findings show general improvements to both housing quality and energy efficiency in the long term. Compared with a decade ago, there are now fewer non-decent and unsafe homes, and more homes in the highest energy-efficiency bands. However, the survey found a “notable increase in levels of dangerous damp and mould” in all tenures when compared with the pre-pandemic levels. This is something the Government is addressing through the implementation of Awaab’s Law.
Key findings include:
- Category 1 hazards remain more prevalent in the private rented sector (10%) than the owner occupied sector (8%) and the social rented sector (4%); however, there have been decreases across all sectors.
- 5% of dwellings in England had a problem with damp, which is higher than in any of the last 5 years. Damp increased across all tenures since 2019, and was more prevalent in the private rented sector (9%), compared to the social rented sector (7%) and owner occupied sector (4%).
- Within the social rented sector, local authority dwellings were more likely to have serious condensation (7%) than housing association dwellings (4%).
- Over the last 10 years, the proportion of homes in the highest energy efficiency bands has increased from 23% to 52%, while the proportion within the lowest bands has decreased (26% to 9%).
- Owner occupied and local authority homes had the highest proportion of central heating (both 95%), followed by housing association homes (91%) and private rented homes (86%).
- Loft and wall insulation has increased over the last 10 years, with around 40% of dwellings having it, an increase from 37%.
- Owner occupiers and social renters were more likely to report having an electricity smart meter (59% and 53% respectively) compared to private renters (47%).
High Court decision on DWP’s direct payments to landlords from Universal Credit
The High Court has ruled the way in which the Department for Work and Pensions (DWP) makes deductions from individuals’ Universal Credit payments to directly pay landlords to cover rent and arrears, without first consulting the person affected and giving them an opportunity to challenge the decision, as “unlawful, because it is procedurally unfair”.
The case concerned payments taken from a Guinness Partnership tenant’s Universal Credit (UC) by the DWP and paid directly to the housing association without any consultation with the tenant. The case was brought by the tenant against the DWP, with Guinness listed as an interested party. The tenant argued making deductions from his UC without giving him the opportunity to challenge the decision was “unlawful as a matter of public law”. During the case, the DWP told the court that changes will be made to the decision-making process where a diversionary payment is requested by a social landlord. In the interim, the process has been changed to allow social housing tenants to challenge a direct landlord payment.
Economic Crime and Corporate Transparency Act (ECCTA): update on changes being introduced this month
Our November 2024 snapshot summarises the key changes being brought in under the ECCTA. Many of these relate to changes to the powers of Companies House and the Government has been phasing these in since March 2024.
Already in force from 27 January 2025, individuals can apply to Companies House to suppress their residential address from historical documents that are available for inspection on the public register, where it is also used as their registered office address.
From 25 February 2025, as part of new powers to query, scrutinise, and reject information on the register, Companies House can strike companies off the register more quickly if they’ve been registered on a false basis.
Other key changes being implemented this month concern identity verification and authorised corporate service providers (ACSPs). Identity verification is a key change brought in by the ECCTA. This means Companies House will be required to verify the identity of anyone who is submitting information to the public register. To complete identity verification, company directors and persons with significant control can either verify directly or use a third party provider, such as a solicitor, accountant or other professional service provider. This is where the new ASCP role comes in - third-party providers who wish to offer identity verification services will first need to register with Companies House as an ACSP. The registration service will open on 25 February 2025 and registered ACSPs will be able to carry out and submit identity verification checks to Companies House from 25 March 2025. In the future, all third parties that file documents with Companies House on behalf of clients will need to register as ACSPs.
Another key upcoming change to be aware of is the new failure to prevent fraud offence. From September 2025, large organisations (as defined under Section 201 ECCTA and which can include large CBSs and incorporated public bodies) can face prosecution if associated individuals commit fraud and the organisation lacks “reasonable prevention procedures.” To start preparing for compliance, organisations should consider scheduling Board training, check compliance policies are up to date generally and develop a robust fraud prevention policy to address the new offence.
If you have any questions around the changes or are considering board training, please get in touch with Rose Klemperer or Sarah Monaghan.
AOB
Forthcoming events
Senior Independent Director Network – 6 May – Virtual
Is your SID part of our network? If not, please email Rose Klemperer for more information.
Register here.
Affordable Housing: Funding, Valuation, and Charging Challenges & Opportunities in 2025
Join us in Birmingham for the fifth of our upcoming regional seminars with JLL, taking place across the UK. We will be bringing together leading experts to discuss the most pressing issues and opportunities in the affordable housing finance sector.
Register here.
Watch on demand events
Housing Company Secretaries Update
In the rapidly evolving landscape of UK housing, it is essential for Company Secretaries to stay ahead of governance issues and hot topics.
Watch the recording here.
Recent articles that may be of interest
Renters’ Rights Bill – Private Landlords and Local Authority Enforcement
Awaab’s law coming – Are you ready? | Bevan Brittan LLP
Renters’ Rights Bill – Reform of possession grounds | Bevan Brittan LLP
