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Lenders welcome plans for standalone social housing regulator

Lenders with more than £60bn invested in housing associations have backed plans to remove social housing regulation from the Homes and Communities Agency (HCA).

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The Council of Mortgage Lenders (CML) said it supports the principle that the sector’s regulation should be completely independent from the HCA. It also welcomed proposals to charge housing associations regulatory fees.

It means backing for an arms-length relationship between the regulation and government funding of housing associations, together with connected land transactions.

The CML pointed out that lenders continue to fund housing in all tenures, and CML members - including banks and investors - have so far provided more than £60bn in finance for the social and affordable housing sector. It said independent and effective regulation ‘is crucial in safeguarding this lender investment, and in encouraging firms to continue to fund the sector’. 

One of the conclusions of the 2016 government review was that there is the potential for a conflict of interests with regulatory and investments activities operating within the same organisation.

While the CML said there has been no conflict of interest while the HCA has operated an ‘ethical wall’ between its funding and regulation arms, the review offers an opportunity to ‘reinforce confidence in the robust oversight of social housing provision’.

It said the case for a ‘clearly independent’ regulator is further reinforced by the increasingly complex funding nature of social and affordable housing.

It said: ‘Without reform, the proposal for the regulator to raise more income from charging fees – which could begin in April – would succeed in making it it more financially independent from the government, but leave the regulator and the government structurally bound together.

‘An independent regulator could establish its own governance arrangements, and set out how it would be accountable. This would strengthen it as a regulatory authority, and reinforce the confidence of lenders and others.’

In its response to the Department of Communities and Local Government’s review of the HCA, the CML said it also backs the use of a legislative reform order as a mechanism for establishing an independent social housing regulator.

The legislative reform order enables the government to amend regulation by using statutory instruments to amend primary legislation without the need for a full blown vote and debate in Parliament.

It added: ‘The proposal to separate the regulator from the HCA and establish it as a stand-alone non-departmental public body would be consistent with the principles of better regulation.’


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