The Regulator of Social Housing has written to registered providers and local authorities on the potential rent cap in social housing, saying that “the safety of tenants and delivery of essential landlord services must not be compromised” when making decisions on how to deal with any potential income loss.

Outgoing CEO, Fiona MacGregor, said: “We recognise that these proposals would have a significant, challenging effect on landlord finances.  Both tenants and landlords face increasing costs and reducing real-terms incomes.

“They will require you to make hard choices about investment and expenditure priorities, revise your business plans and take action to maintain compliance with the regulatory standards. Although the outcome of the consultation is not yet known, it is essential that these preparations happen now.

“In making these decisions, the safety of tenants and delivery of essential landlord services must not be compromised. As always, if you identify any material concerns about your ability to meet the regulatory standards you should inform us immediately.”

On exemptions, MacGregor says “these will only be granted where a provider demonstrably cannot maintain its homes appropriately and remain viable while meeting the rent standard.”

She added: “The FFRs, annual accounts and quarterly surveys give us good information on which providers will be most affected by the proposals, and so we are not asking for revised returns or additional information at this point.  Over the autumn we will engage with all larger providers through the Stability Check round to understand the current position and how plans are progressing.

“We appreciate that circumstances have changed since the FFRs were submitted in June and will be proportionate in our approach, while seeking to ensure that our published judgements on providers remain appropriate.

“As always, if you identify any material viability concerns or other failure to meet the standards you should inform us immediately.

“We understand that providers are long-term businesses, and changes to rents – even for a short period – will have a lasting impact.  In the short-term, however, providers will need to identify how they can adjust to maintain their viability and support their tenants in difficult times.”

In particular for local authorities, MacGregor made similar comments about difficulties around exemptions: “Whilst we regulate local authority registered providers’ rents, we cannot agree exemptions from the rent standard. However, local authority registered providers can apply to the Secretary of State for exemption where complying would cause the authority unavoidable and serious financial difficulty.

“We understand that changes to rents – even for a short period – will have a lasting impact on the HRA.  In the short-term, however, all providers will need to identify how they can adjust to maintain their viability and support tenants in difficult times.”