Housing associations are set to rival landlords in providing for the needs of the rental sector by offering similarly priced accommodation to the buy-to-let sector, according to the Joseph Rowntree Foundation (JRF).
However, work needs to be done on the Housing Corporation’s regulatory framework for this to happen.
JRF’s research shows less than 5,000 housing association homes in England are let at full market rents, and the regulatory regime was the main deterrent for expanding into the sector.
Author of the report, Professor Barry Goodchild, believes the existing regulatory regime fails to acknowledge the role associations could play in meeting the demand for homes at market rents.
He said: ‘Housing associations also want the Housing Corporation to recognise the potential contribution that market renting could make to their finances and viability in areas where demand for social housing is declining. We recommend the regulatory framework should be changed to embrace the legitimate role of associations in providing homes at affordable market rents ‘ particularly where this contributes to area regeneration. ‘
As Registered Social Landlords, associations are expected to devote at least 50% of their activities to social housing. If market renting accounts for more than 5% of their activities the regulatory framework also indicates increased regulation may be justified.
The concept was welcomed by the Association of Registered Letting Agents (ARLA), which represents the commercial side of the market.
Malcolm Harrison, spokesman for ARLA, said: ‘The entrance of the associations fully into the market would not hit the small buy-to-let investor. The rental market is growing, all forecasts are for exponential growth on the demand side, plus housing associations would not be investing in the same sorts of area as an independent investor. ARLA would applaud the associations, as long as they accept that market forces are for everybody.’