Supporting Housing Associations to prepare for commonhold is a new report from the UK Collaborative Centre for Housing Evidence, written by Dr Jenny Preece and Dr Yu-Tung Wu from the University of Sheffield. The report is informed by a prior study consisting of 20 interview with housing leaders and key stakeholders surrounding upcoming commonhold reform, and the implications for the social housing sector.
Proposed commonhold reforms hold serious implications for registered providers, particularly those operating within mixed tenure developments. For providers, the transition presents a number of operational and governance challenges, with responsibility for managing buildings would increasingly sit with Commonhold Associations, potentially reducing landlords’ direct control over building maintenance, financial management and safety.
The report draws on the previous research conducted with associations to establish six key challenges that face providers ahead of the proposal, and concludes with a number of recommendations for both the sector and government.
Demand
The foremost challenge for associations is understanding how many leaseholds buildings could potentially convert, and the demand for new commonhold homes. This is an area of little certainty, with question marks over consumer demand, property valuations and the availability of mortgage products.
This is a particular challenge for larger providers delivering phased developments where commonhold properties could sit alongside homes still being sold under leasehold arrangements, creating a complicated management structure within the development.
Mixed-tenure developments
Mixed-tenure developments are an area in which the commonhold transition could have major impact. Where social rented and shared ownership properties exist alongside privately owned commonhold homes, housing associations could find themselves operating within management structures over which they have limited control. This can cause major complications when it comes to building maintenance, safety and compliance issues, especially in situations when commonhold associations are responsible for decisions concerning an entire building.
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The report also warns that associations may respond by separating different tenures within developments, counterintuitive to mixed-community objectives and potentially reinforcing stigma surrounding social housing residents.
Regulatory responsibilities
The transition brings forward major questions surrounding accountability. Providers could be expected to take on director roles within Commonhold Associations creating additional responsibilities and potential liabilities, whilst still juggling existing regulation despite no longer having sole control over building management. The report calls for greater clarity from the Regulator of Social Housing and Housing Ombudsman as to how existing regulation will operate in these circumstances.
Asset management & financial planning
The proposals will also have a significant amount on providers’ financial preparation, with the report highlighting sink funds as an area of uncertainty, including how contributions should be calculated to cover the long-term lifecycle costs of buildings. A loss of control concerning asset management and potential fragmentation when responsibility shifts to Commonhold Associations could also have impacts on Housing Associations’ ability to plan for major work across their stock portfolio.
Developing skills
Commonhold naturally places more responsibility on residents, and an opportunity to participate in the governance and management of their buildings. This responsibility comes with a stringent list of requirements, however, and the research identifies significant training requirements for residents taking on director positions within Commonhold Associations.
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Practical skills and knowledge surrounding areas such as regulatory compliance, health & safety and financial management are vital, along with soft skills such as conflict resolution and clear communication. Without the correct training, residents could find themselves unprepared for the responsibility that comes with Commonhold Associations, and the report also highlights potential tension between the move towards resident-led building management and the wider professionalisation of housing management.
Capacity
As is often the case in the sector, a large part of the conversation is where will this capacity come from. Providers are already dealing with a number of other regulatory shifts such as the second phase of Awaab’s Law, STAIRs and the competency and conduct standard, and the transition will place competing demands on resources and staff capacity. Associations will need to delegate the necessary resources to ensure a smooth transition, and additional training may well be required to ensure staff are fully informed on the implications of the reform.
Final recommendations
The report concludes with a number of recommendations for both government bodies and housing associations in light of its research.
The first and foremost recommendation to the government is a detailed road map and timeline of commonhold reform, along with consideration of the interactions between commonhold
reform and other legislation in development. The Regulator of Social Housing and Housing Ombudsman should also provide clear guidance on how standards will be applied relevant to commonholds, as well as outlining the role associations may play in the governance of Commonhold Associations.
Associations should audit their stock and development pipeline according to the report, in order to identify buildings which would be eligible for commonhold. They should also establish cross-organisation working groups to understand the implications of the reform, whilst sector membership bodies should consider the potential role they can play in developing commonhold related training for associations.
