The government published its response to the Supported Housing (Regulatory Oversight) Act 2023 (the Act) consultation on 16 April, setting out its intended approach for implementing a new regulatory framework for supported housing in England.

The reforms aim to improve standards across the supported housing sector and address concerns about rogue providers operating in a largely unregulated environment. However, the new framework will also introduce significant operational, regulatory and financial implications for landlords, managing agents, support providers and local authorities involved in delivery. This insight outlines the key proposals and how the regulatory reforms will affect these organisations.

Introduction of Licensing Regime for Supported Housing

A key proposal is the introduction of a mandatory licensing regime for supported housing in England. Local authorities will be responsible for administering and enforcing the scheme, with the aim of improving consistency, accountability and oversight across the sector.

The regime is expected to apply broadly, covering defined categories of “supported exempt accommodation”. However, the government has expanded the list of exempted services which will not require a licence. This now includes supported housing for young people aged up to 25, which is regulated by Ofsted, and low-cost older person services for people aged over 55.

The government’s response provides further clarity on who will hold the licence in multi-party delivery models. Under the Act, the licence holder must be the person “managing or in control of” the supported housing provision. The response clarifies that where multiple organisations hold the licence, this can be agreed between the parties and discussed with the local authority if needed.

For managed schemes, the parties will need to agree who will hold the licence, and this should align with the contractual arrangements in place. There remain some questions here about potential risks where, for example, one party has operational responsibility and the other has responsibility for the property. The government has confirmed that licensing guidance will provide case studies and that in many cases the managing agent is likely to be the appropriate person where it exercises day-to-day operational control.

National Supported Housing Standards

The government has also confirmed the introduction of National Supported Housing Standards, covering both the quality of accommodation and the support provided to residents.

Providers will be required to demonstrate:

• Effective housing management arrangements;
• Appropriate safeguarding processes;
• Clear and consistent support delivery models;
• Robust governance and oversight structures.

Managing agents may face increased contractual and regulatory exposure where property management failures lead to breaches of licensing conditions or standards, particularly in relation to repairs, health and safety compliance and anti-social behaviour management.

In practice, the standards broadly align with aspects of the regulatory framework applicable to registered providers of social housing – but complying with the framework may be more challenging for managing agents which are not registered providers.

Housing Benefit and Financial Risk

A further key development arising from the consultation is the government’s intention to link compliance with licensing requirements and standards to Housing Benefit eligibility – a position supported by over 70% of respondents.

Given that many supported housing models rely heavily on Housing Benefit income, failure to obtain a licence could have significant financial consequences. Providers operating below required standards may therefore face not only regulatory action but also the loss of crucial funding.

Conclusion: Increased Oversight and Enforcement

The reforms signal a broader shift towards stronger regulation of the supported housing sector.

Local authorities will be given enhanced enforcement powers and there will be greater expectations around partnership working and information sharing. 

This will increase both regulatory and reputational risk for organisations operating in the sector, particularly where governance oversight is weak. This is especially relevant in lease-based models involving private landlords and third-party support providers, where accountability for compliance is often complex and fragmented.

Capsticks’ View: Next Steps

The consultation response confirms that the supported housing sector is entering a period of increased regulation and scrutiny.

While reforms are designed to improve standards and protect vulnerable residents, they will also create significant compliance, governance and financial risks for all providers of supported housing.

Following the publication of the consultation response, additional regulations are required before the regime comes into force, with further detail on timing expected following secondary legislation. The government is expected to consult on the draft regulations and accompanying guidance later this year. However, organisations delivering supported housing should begin preparing now for the introduction of licensing and National Supported Housing Standards. They should also review existing operational and contract arrangements ahead of the reforms coming into force.

How Capsticks Can Help

Capsticks advises landlords, managing agents, support providers and local authorities all across the housing sector. Our team can help your organisation to prepare for the new licensing and standards regime, as well as assess operational and contractual exposure arising from the reforms.

If you have any queries about the issues discussed in this insight and the impact on your organisation, please speak to Legal Director Katrina Day to find out more about how Capsticks can help.