Housing Associations – which fall under the legal banner (in Wales) of Registered Social Landlords (RSLs) – provide just over 150,000 (or 69.3%) of all social homes available for rent in Wales as of 2022-231.
The sector lies in a grey zone of providing a public service whilst effectively being run as businesses within the private sector.
Additionally, some Welsh councils have maintained council housing while others have no council-let housing at all.
1. StatsWales, “Self-contained stock at social rent by local authority area and provider type” (2022-23). Available at: https://statswales.gov.wales/Catalogue/Housing/Social-Housing-Stock-and-Rents/selfcontainedstock-by-area-providertype
A housing association is a not-for-profit business that provides social housing.
Most homes managed by housing associations are standard self-contained houses, flats or bedsits/HMOs. Some housing associations provide sheltered/supported accommodation for the disabled and elderly, while a few also run residential care homes.
Housing associations have existed since the 19th century. They came into greater prominence during the 1970s and 1980s when the UK Government (particularly the Conservatives under Margaret Thatcher) changed the law to restrict local councils’ powers to subsidise council housing.
A legal mechanism known as a Large Scale Voluntary Transfer was introduced to allow councils to transfer their council housing stock to housing associations. Transfers had to be approved by a referendum of affected tenants.
Housing associations can be run in different ways – though they almost always have a charitable, social enterprise or not-for-profit purpose.
The growth of housing associations
As well as UK law changes, there were two other key factors leading to the expansion of housing associations.
The first is the Housing Revenue Account (HRA) system. Any local authority with more than 200 council homes had to record how much they were spending on and making from their council housing stock. This money was ring-fenced so that council tax couldn’t be used to subsidise council housing and council housing rental income couldn’t be used to cut council tax.
If a council brought in more money than they spent, the surplus couldn’t be reinvested and had to be sent to the UK Treasury. This money was used to subsidise rent rebates and cover shortfalls between spending and expected rental income.
The HRA system pushed more councils towards stock transfers because the system made investing in council housing less attractive. Meanwhile, housing associations would be in a better position to invest in new homes or upgrades because of the different financial rules.
The second factor is the Welsh Housing Quality Standard (WHQS).
The WHSQ sets a minimum standard for all social housing in Wales – whether provided by a council or housing association. This would have again pushed councils that were unsure whether they had the money to invest in their housing stock towards a stock transfer.
