Lenders have indicated their support for separating the regulation of social housing from the Homes and Communities Agency (HCA).
The Council of Mortgage Lenders says that members have to date provided ‘more than £60 billion in finance for the social and affordable housing sector’ and believes that independent and effective regulation is ‘crucial in safeguarding this lender investment and in encouraging firms to continue to fund the sector.
The CML welcomed the November decision in the Tailored Review of the Homes and Communities Agency that the Department for Communities and Local Government was in favour of establishing a regulator separate from the HCA.
A consultation on using a Legislative Reform Order to establish the regulator as a stand-alone body ran for two months, closing on 28 January.
“While we are not technical experts on this legislative process, we support regulation that is independent from government funding of housing associations, and from land transactions affecting them,” said a CML spokesperson.
“The proposal to separate the regulator from the HCA and establish it as a stand-alone non-departmental public body would be consistent with the principles of better regulation.”
The CML says that up to now, the HCA has operated an ‘ethical wall’ in regulating the sector, and accepts that there has been no conflict of interest.
However, the spokesperson says that the new proposal “presents an opportunity to put in place an independent regulator, which will help reinforce confidence in robust oversight of social housing provision.”