The Regulator of Social Housing (Regulator) ran a consultation on proposed changes to the way it charges fees to registered providers of social housing (RPs) which concluded last year. The Regulator has now published the outcomes of that consultation and confirmed that the new fee regime will apply from 1 July 2024.

The overall intention of the new fee regime is to ensure that RPs pay for the full costs of their regulation, rather than the Regulator having to rely on grant-in-aid issued by government. Securing consistent funding is critical to the Regulator carrying out its role effectively, especially since the Regulator will move to a proactive system of consumer regulation with inspections of local authorities against the consumer standards for the first time.

The decision statement from the Regulator specifically confirms that:

1. A fixed fee will apply to all applications for initial registration, rather than being charged on successful registration.
2. The Regulator will continue to charge large RPs (i.e. those with 1,000 units or more) an annual fee set by reference to the number of social housing units owned by that RP. This includes local authority RPs.
3. Small RPs (i.e. those with fewer than 1,000 units) should be charged a fixed annual fee. For small local authority RPs, this fee will initially be set at zero, to reflect the level of regulatory engagement generally needed, but will be kept under review and may be subject to change.
4. For groups owning 1,000 social housing units or more where the parent is an RP, the annual fee should be set at group level rather than for each individual RP. Where a group does not have an ultimate RP parent, the fee will be set at each entity level for each RP.
5. RPs must pay the full cost of the annual fee for the year that they are on the register when they register or de-register.
6. The Regulator will publish information and guidance annually on its costs and fees.
7. The Regulator will continue to utilise a Fees and Resources Advisory Panel, and will include local authority representatives on that for the first time.

In direct response to some of the concerns raised in the consultation by RPs, Regulator has also committed to engage with the sector if it intends to raise total fee income year to year (from the 2025-26 steady state level) beyond the rate of CPI inflation.

The Regulator has also sought to provide assurance that there is no cross-subsidy between private RPs and local authority RPs, by agreeing to set out:

1. details of its budgeted costs, including the proposed split in expenditure between the two types of provider, in the Regulator’s corporate plan; and
2. details of the split in its costs between the two types of provider to the Fees and Resources Advisory Panel.

Those figures may then be used to inform any rebates of fees that may be due to RPs.

The Regulator will shortly be writing to all RPs to confirm their fee levels for the period 1 July 2024 to 31 March 2025.

How Capsticks can help

Capsticks aims to be the firm of choice for RPs, offering a full service from governance and regulatory advice to banking and finance, leasehold and asset management. We are experts on all aspects of compliance with these new legal requirements and can advise on the broader changing landscape of the housing sector.

If you have any queries around what's discussed in this article, please speak to Darren Hooker to find out more about how Capsticks can help.