DIY Housing Association?

by Readers Question

10:09 AM, 20th November 2020
About 2 weeks ago

DIY Housing Association?

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DIY Housing Association?

As everyone knows there is a never-ending amount of pain heaped upon the private individual landlord with unnecessary and expensive regulations and taxes upon taxes.

Whilst we sit here wondering where it is going to end, we look at our opposite numbers providing the same services in the council and housing associations largely exempt from the same rules that drive private landlords from the business.

I wonder, can one set up their own housing association?

Is it too complex, too costly?

Why can’t the existing Landlord’s associations setup a legal framework that would mean their members become part of a housing association?

I await your informed comments either way.

Amazonia Starbuck


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Comments

Jon Sear

11:00 AM, 20th November 2020
About 2 weeks ago

I thought Housing Associations were more regulated than the private sector. I had a look a few months back and quickly decided I would need a much bigger operation for it to be viable. The guidance is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685417/Guidance_-_Registration_for_new_entrants_Jan_2018.pdf What unnecessary regulations would we be seeking to avoid by registering as a Housing Association? Some sort of umbrella HA for private landlords who wish to act as social housing providers is an interesting idea, but I can't imagine it would be straightforward to set up?

Marcus Cassidy

11:16 AM, 20th November 2020
About 2 weeks ago

Or group together and buy an existng one. There are several smaller ones that could be bought out that already have the status and meet all the criteria.

J CHAPMAN

13:54 PM, 20th November 2020
About 2 weeks ago

I might be wrong but I thought a Housing Association had to be non profit making.

Jon Sear

14:45 PM, 20th November 2020
About 2 weeks ago

Reply to the comment left by J CHAPMAN at 20/11/2020 - 13:54
I'm sure it does, but if the amount of profit is broadly in line with the amount of work being done it could be paid as a managers salary.

WP

17:54 PM, 20th November 2020
About 2 weeks ago

I'm looking at this from the opposite end of the spectrum, but a great question! How do I employ a bona fide HA/social provider to lease my property/ies to? I'm finding it VERY difficult to find ones, let alone any background info on them, other than what they post on their own websites.
I have just asked for a FOI request from local council who use a number of organisations.
My next biggest fear is what to look for in a contract they offer to me? I have heard too many horror stories for sure about entering into such contracts but there is no one place that gives advice as what I should actually be wary of. Any non profit HA out there willing to share a draft of a contract you send to LL's who lease their houses to you so I can at least have an idea???

Robert Mellors

18:09 PM, 20th November 2020
About 2 weeks ago

I am both a private landlord, and I have also set up (and still run) a housing association.

These have to be entirely separate, as the housing association is a "not-for-profit" organisation and has to be able to evidence this.

AMAZONIA STARBUCK

21:03 PM, 20th November 2020
About 2 weeks ago

Reply to the comment left by Robert Mellors at 20/11/2020 - 18:09
I just had a look at the accounts of our local not for profit charitable housing association and 2 people are earning £110 k plus pension contributions on an 11 million pound income with 2 million pounds surplus.
This comment is in no way a criticism of their salary level but just an illustration of what one can earn in a not for profit organisation.

AMAZONIA STARBUCK

21:05 PM, 20th November 2020
About 2 weeks ago

Hi Robert, are there employees in your housing association earning a reasonable salary?
I totally understand you may feel a public forum is not the place to discuss these matters.

matchmade

9:34 AM, 21st November 2020
About 2 weeks ago

On the face of it, a good idea, but how onerous is the work involved in setting up a HA and how does an asset/shareholder get her money out, both income and capital?

Would setting up a real estate investment trust (REIT) be a better idea, with small landlords pooling their assets in exchange for shares in a collective vehicle? This might however generate unaffordable individual capital gains and cause problems with existing mortgage providers, unless the REIT could raise capital on its own to buy off the mortgages. The costs of running such a geographically-dispersed operation might also outweigh any tax gains, unless shareholders commited to keep running "their"properties to an agreed standard, using their existing contacts and unpaid labour. Just floating ideas here . . .

Robert Mellors

9:57 AM, 24th November 2020
About A week ago

Reply to the comment left by AMAZONIA STARBUCK at 20/11/2020 - 21:05
Hi Amazonia Starbuck !

The staff of a housing association can be paid a salary commensurate with their role, hours, and responsibilities. Any wages or salary has to be "reasonable", and demonstrably so.

A registered housing association is monitored and regulated by the Regulator of Social Housing, so I would suggest that you read up on the compliance criteria that they publish, particularly the regulatory standards and procedures, and the governance and financial viability, sections of their guidance.

If you are thinking in terms of making money from a housing association then your motives and mindset are all wrong, and you will find that the onerous level of work involved is far in excess of what you expected and the salary is far worse than what you would earn operating as a private landlord.

You could not, for example, simply lease your privately owned properties to your own housing association and pay yourself a salary for managing them, as that would be a clear conflict of interest and would be against the "not-for-profit" status of the housing association. Housing associations have been struck off the register (by the Regulator of Social Housing) for this type of arrangement.

Note that your "board" of trustees would have overall responsibility for the running of the housing association, and as such they would be able to override any decision you wish to make, and even sack you from your role as managing director, CEO, (or whatever other title you may use).

Alternative formats may include: a charity, a co-operative, a not-for-profit organisation, an industrial and providence society, or an almshouse, but each comes with it's own set of regulation and compliance criteria, and setting up any of these is not for the fainthearted. They all have different pro's and con's, but none of them are likely to make you any money, as that is not their reason for being.

If you are still keen on the idea of setting up a housing association, then your first step would be to read all the guidance issued by the Regulator of Social Housing, then read the guidance issued by the Charity Commission. If that does not put you off, then get in touch and we can discuss your ideas further.


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