20 October 2006
A rule that prevents housing associations from devoting more than half their business to wider activities could be scrapped.
Following pressure from landlords, the Housing Corporation plans to review a requirement that no more than 49% of business can include open market sales, homes let at market rents and community services such as child care.
Providing accommodation for students and some key workers is also seen as outside social housing, although low-cost ownership schemes funded by the corporation, including shared ownership, count towards the 51%.
A National Housing Federation spokesman said registered social landlords were calling for more freedom to be innovative and support neighbourhood regeneration. 'There should be a more sophisticated approach to risk,' he added.
Adrian Moran, policy manager at the corporation, said consultations would be launched in the next few months. 'As we move towards
risk-based regulation, this sort of approach looks more and more dated,' he said.
Although RSLs want greater freedom to offer community services, the scrapping of the rule would also allow them to build more homes for sale at market prices.
Last year, more than 7,200 homes built by RSLs were sold on the open market, compared with just under 6,000 in 2004/05. In March, the corporation warned that too many associations rely on property sales to make surpluses.
The review of the 51% rule was announced on October 13 as part of the corporation's new neighbourhoods and communities strategy.
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