Housing Associations - Funding and Regulation

Funding and Regulation

Housing associations' day-to-day activities are funded by rent and service charges payments made by, or on behalf of, those living in its properties. In this sense, housing associations are run as commercial entities and the majority do not depend on donations for their general activities.

New housing generally receives economic subsidies, the source of which will depend on where the association is based:

• In England, housing associations are funded and regulated by the Homes and Communities Agency (HCA), except that from April 2012 funding in London comes under the Greater London Authority. The HCA's predecessor until 2008 was the Housing Corporation. The Housing Corporation's regulatory role was split out to a separate body from 2010, the Tenant Services Authority (TSA), but merged again into the HCA from April 2012.

• In Northern Ireland, the same role is carried out by the Northern Ireland Housing Executive.

• In Scotland, this function is fulfilled by the Scottish Government.

• In Wales, the regulation and funding of housing associations is carried out by the Welsh Government.

Subsidies for new homes (often termed 'social housing grant') amount to sizeable public investments. In its 2008–11 Prospectus, the Housing Corporation stated that in the three-year period to 2011 subsidy would be "at least £8 billion". The majority of this would go to housing associations for use in development projects. Since 2003, in an effort to seek greater value for money, much of the funding by the Housing Corporation for new house building has been channelled to fewer than 80 "developing housing associations" that have achieved "partner status" through Partner Programme Agreements.

Housing associations borrow money to pay for new homes and improvements. After the Housing Act 1988, the proportion of the cost of new homes met by capital grant was scaled back by the Government, so borrowing became the primary source of funding for investment. Much of this was simply borrowed from banks and building societies, but after the late-2000s financial crisis these institutions ceased to offer long-term loans, so developing associations are increasingly turning to corporate bonds to raise funds for expansion.