Councils have warned they will be forced to cut the building and maintenance of social housing, or even sell off properties, due to a lack of funding to meet new laws to fix damp and mould.
Local authorities and housing associations now have to repair such hazards reported to them within 24 hours after Awaab’s Law came into effect in October.
Councils said the reforms, made after two-year-old Awaab Ishak died from mould exposure at his Rochdale home in 2020, will cost at least £180m and are piling extra pressure on council budgets.
The Government’s impact assessment estimated that the first phase of Awaab’s Law legislation will cost local authorities £180.6m, which applies to emergency hazards, damp and mould.
The regulations will then be extended over the next two years to cover more hazards, such as excess cold and heat.
Richard Wright, chair of the District Councils’ Network, said councils were not given extra money by the Government to meet the requirements of Awaab’s Law and are having to use their Housing Revenue Accounts (HRAs), which are legally ring-fenced pots for managing and building social homes.
He warned that councils could be forced to cut housebuilding and maintenance on existing housing stock to fund the upgrades, leading to more problems in the future.
“You have to look at your development programme within your HRA,” he said. “If you haven’t got that headroom, then it’ll cause you to look at what your development programme is.”
English councils manage 1.6 million homes, according to the Regulator of Social Housing, and built 2,850 social homes in 2023/24.
Analysis of councils’ predicted sales figures by The i Paper suggests that, under the right to buy scheme, more than 18,500 social homes will be sold off in 2025/26.
Wright, who is also leader of North Kesteven Council, said councils can apply for funding from Homes England to build social homes, but it’s “not a huge amount of money”.
He said local authorities are turning to the private sector to deliver social homes, but developers often fail to meet their affordable housing targets because doing so would cut into their profits and make projects financially “unviable”.
Two-year old Awaab Ishak was killed by a respiratory condition caused by exposure to mould in his home (Photo: PA)A local government source, who spoke anonymously, said councils could cut back or delay maintenance such as replacing fences, windows, roofs and guttering, “that’s not failing at the moment”.
The Government has pledged to deliver 300,000 new social and affordable homes over a decade and 1.5m new homes by 2029.
Danny Adilypour, deputy leader for housing, investment and new homes at Lambeth Council in London, said the local authority is struggling with insufficient funding to maintain and repair its 33,000 social homes.
Last year, the council got exceptional financial support from the Government, including a £40m loan for housing.
Adilypour said Lambeth Council is reluctantly having to sell off some run-down properties because the costs of bringing them back into use are too high and “we wouldn’t get that back in social rent over the life cycle of that property”.
“Our preference would be that we would directly deliver new homes ourselves and use money from the HRA to do that,” he said. “We’ve had some successes over that in recent years.
“But the reality is, given the constraints on HRAs at the minute, most of the big schemes are bringing forward in the now to be through development agreements with partners in the private sector, because that’s the only way we can make the money stack up.”
He said other councils in London are struggling with a lack of funding too.
“There’s a lot of places that aren’t bringing forward as many types of development as they would like,” he added.
Chloe Fletcher, head of policy at the Chartered Institute of Housing, which represents those working in the sector, said building new homes “will definitely be one of those things” that councils “will look to either not to do or cut back” when faced with budgetary pressures.
She said Awaab’s law is “an additional burden” on councils, which have had to spend money on setting up new systems to monitor reports of hazards.
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“London boroughs are probably worst affected, and their counterparts in places like Birmingham are probably as bad just because of the type of stock, and historically, some of the bigger problems with damp and mould,” she said.
“For example, in the London boroughs, if you’ve got some old 1960s flats that are very much coming to the end of their life and all need a major refurbishment, that’s very costly.”
To generate more funding, the Local Government Association and London Councils have been urging the Government to allow them to raise some social rents by at least £2-£3 a week to bring them in line with similar properties.
The Government is expected to announce such “rent convergence” measures in January but the amount of the uplift could be just £1 a week.
A spokesperson for the Ministry of Housing, Communities and Local Government said: “Our landmark Awaab’s Law gives tenants the power to hold landlords to account so we can crack down on unsafe conditions like damp and mould and make homes safe.
“We’re also investing £39bn to help build the biggest boost to social and affordable housebuilding in a generation and restore the dream of homeownership.”
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