05 September 2003
Housing associations are confounding the critics and restructuring rents without most of the anticipated problems.
New Housing Corporation figures show that only 1% of registered social landlords have failed to draw up a plan for fixing their rents in line with local earnings and property prices.
The new formula came into effect from April 2002, although RSLs have ten years to reach the final figure. It was expected that the changes would cause major problems for some landlords – especially where lower rents would mean a drastic cut in income.
However, by the end of 2002/03, just 23 out of 2,044 RSLs regulated by the corporation were still reporting problems. Twelve of these are black and minority ethnic (BME) RSLs that will probably qualify for assistance from a £15m fund set up to support them.
Norman Perry, the corporation's chief executive, said the number of RSLs in difficulty was nowhere near as high as predicted. 'Everyone thought it would be a disaster but it's turned out not to be,' he said.
In addition to landlords that have still to finalise plans, ten RSLs that were set up following stock transfers have applied for exemptions beyond 2012 after showing that they would not otherwise meet business targets.
James Tickell, deputy chief executive at the National Housing Federation, said lower rent income might still cause long-term difficulties. 'RSLs won't have the same capacity to meet government objectives,' he said. 'People haven't wanted to contact the Housing Corporation. It's almost an admission of financial problems.'
The Housing Corporation's annual report, published on August 28, also shows that 47 RSLs were under supervision or subject to corporation intervention at the end of 2002/03 compared with 62 at the end of the previous year and 81 two years earlier.
The corporation has, meanwhile, launched the first national database of BME contractors and suppliers and urged all associations to make more use of them. 'We want to give the black business sector a fair crack of the whip, especially as there is a huge element of public funding involved,' added Perry.
PFsep2003
