Sector Risk Profile 2023: Key risks to look out for

Following the publication of the 11th annual Sector Risk Profile (SRP) on 14th November 2023, we’ve summarised the key takeaways to help you understand the most significant risks and challenges facing registered providers and local authorities which own social homes. 

Read the full Sector risk profile 2023 here. 

The main focuses highlighted in this year’s SRP include the economic climate creating difficult trade-offs for Boards, limited access to skill and labour, organisations neglecting to prioritise tenants’ safety from damp and mould, and the upcoming changes to consumer standards. Each of these areas is summarised below, alongside the other relevant risks that you need to be looking out for and actions that you can be taking to proactively manage these risks.  

Create a clear strategic plan 

One of the key points highlighted in the SRP is the importance of articulating your priorities and purposes and having a clear strategic direction in place for your organisations to follow. Nationwide economic struggles have resulted in weakened financial capacity across the sector and increased pressure on providers’ business plans, making it harder for them to deliver competing objectives. This will mean Boards have to face difficult trade-offs as they consider their priorities, ensuring their organisations remain viable and continue to deliver strategic objectives at the same time as prioritising essential services and safety.  

Boards will have less margin for error in their decision making and will need skill and judgement when managing risks to deliver objectives, identifying pressures, and ensuring mitigation plans remain robust. Be prepared to deal with competing demands between focusing your direction on development and ensuring your properties are safe.  

It is important to remember that while the sector is facing economic hardship, many tenants will also be experiencing significant cost of living pressures; continuing to deliver quality services to your tenants is a top priority.  

Adapt to and prepare for economic shocks 

Due to the deteriorating macroeconomic environment stemming from Covid-19 and Brexit, the housing sector is suffering from high-cost inflation, difficulties in accessing skilled labour, and contractor failures and supply chain issues which are causing delays to works, and an increased cost for providers. Further unexpected shocks also pose a threat from the ongoing war in Ukraine, instability in the Middle East, and higher interest rates weighing on the UK and global economy. 

Boards must undertake stress testing of key assumptions, including rents policy, and establish robust mitigation strategies to address any future possible shocks. For Boards to ensure their organisation remains financially viable, they must also fully understand their organisation’s assets, liabilities, and operating environment. 

Maintain the quality of your stock 

Under the requirements of the Social Housing (Regulation) Act 2023, providers must be supplying homes that are decent, safe, and well-maintained. They must ensure that tenants are protected from serious hazards in their homes, as well as having an increased voice to speak up on health and safety risks. To discover more about these requirements, read our dedicated blog, ‘Social Housing (Regulation) Act 2023: Your tenants’ rights’. – link to blog 

Neglecting to maintain your homes to a decent standard or providing constructive, timely responses to tenant complaints can cause major health and safety hazards, as well as a loss of trust and confidence in landlords that could damage the reputation of the sector. 

To manage your stock effectively, you must have detailed knowledge of the stock condition, underpinned by accurate, up-to-date, and robust data from stock condition surveys that adequately assess all four criteria of the Decent Homes Standard. 

If you are struggling to understand the condition of your assets, having a stock condition survey will enable you to make informed decisions on investment quickly and efficiently. Book a free one-to-one stock condition consultation with one of our experts here. – link to stock condition survey page  

Keep tenants safe from damp and mould hazards 

Keeping your tenants safe must always remain the top priority for any landlord. The SRP highlights damp and mould as an area that requires increased attention following the tragic death of Awaab Ishak. Specific damp and mould legislation, Awaab’s Law, was implemented earlier this year to prevent any tragedies from happening again and to highlight the importance of providers holding comprehensive stock data in ensuring tenant safety.  

Boards must understand the regulations of Awaab’s Law to gain assurance that tenants understand their rights and that concerns raised about damp and mould will be addressed effectively and within a set time frame. To find out how to comply with the regulations of Awaab’s Law, read our blog, ‘Awaab’s Law: What to expect’. – link to blog  

The RSH foregrounded the significant number of providers who reported being affected by continuing high demand for damp and mould works, from either proactive property inspections or from increased tenant awareness. With this increased focus on damp and mould hazards, it is crucial that you prioritise more of your time and care on keeping tenants safe.  

If you need help with any area of your damp and mould approach, speak to one of our consultants to gain assurance that your practices are robust or book a damp and mould survey for your buildings. Get in touch CTA 

Ensure you meet consumer standards 

As a provider, you must supply good quality housing services to your tenants. It is the responsibility of boards and councillors to ensure that providers maintain compliance with consumer standards. You must measure and understand your organisation’s performance against consumer standards and have accurate and robust Tenant Satisfaction Measures (TSM) data for 2023/24. Failing to meet consumer standards or record TSM could result in a lack of trust from tenants.  

From April 2024, the RSH will be replacing the existing set of consumer standards with a new set of standards that registered providers must meet so tenants can live in safe, quality homes, have choice and protection, and can hold landlords to account. The RSH will have strengthened powers to set these standards and proactively regulate them, meaning Boards, councillors, and registered providers must prepare for this new framework.