The new code is tailored to the “distinct elements” of FPRPs’ structures, such as the fact that they are often part of wider groups of connected companies
The British Property Federation has today published a bespoke governance code of practice for for-profit registered providers of affordable housing.
The purpose of the new code is to promote good governance among for-profit registered providers (FPRPs), safeguard the interests of shareholders, customers, and other stakeholders, and protect the sector’s reputation.
While the code is informed by existing codes of governance used by the National Housing Federation, as well as the UK Corporate Code and the European Confederation of Directors’ Associations (ecoDa), the British Property Federation (BPF) has developed its own for FPRPs due to “the distinct elements of these organisations”.
In March 2022, the RSH set out its approach to regulating FPRPs, highlighting that FPRPs “have different capital structures and cash flow dynamics [to not-for-profit providers] and are often part of wider groups of connected companies rather than standalone organisations”.
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The BPF, along with consultancy Campbell Tickell and an advisory group of investors and advisors from the law firm Trowers & Hamlins, led by partner Rob Beiley, have worked together for almost a year to develop the code.
The BPF acknowledges the importance of good governance practices, in the context of institutional investment, primarily through FPRPs, playing an increasingly significant role in the provision of affordable housing.
According to a recent report by Knight Frank, for-profit RPs could triple their affordable housing portfolios, meaning they could own more than 86,000 homes by 2028.
The code establishes core requirements for FPRPs, including the need for the RP to meet the Regulator of Social Housing’s (RSH) regulatory standards.
In addition, if the RP is part of a group structure, it states that the board must regularly assess the effectiveness and appropriateness of the relationship between the RP and other entities.
The code also states that the board’s actions and decisions must “take into account the importance of maintaining stakeholder trust in the RP, and upholding its and the affordable housing sector’s reputations”.
Greg Campbell, partner at Campbell Tickell, who drafted the code with colleague Ceri Victory-Rowe said that the existing codes of governance used by many organisations in the sector “all have particular strengths”.
Campbell noted: “None of them however is quite right for FPRPs, in recognising the distinct elements of these organisations while ensuring a commitment to the highest standards in governance for the regulated social housing sector. This code is designed to fill that gap, and we are confident it will be welcomed by FPRPs”.
Ian Fletcher, director of policy at the BPF said: “Housing is essential to the UK’s economic and social prosperity. Pension funds are a key source of new capital for delivering homes and, as we set out in our manifesto for housing – Building for Generations, our offer to the next government is to deliver a step change in output of homes across all tenures, including affordable housing. The publication of a code of governance for for-profit registered providers provides a framework that will enable providers to demonstrate to stakeholders the highest standards of good governance and positive stewardship of affordable housing”.
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