Inclusion Housing Community Interest Company v Regulator of Social Housing [2020] EWHC 346 (Admin)

I think this is the first judicial review of a regulatory decision by the Regulator of Social Housing and whilst, ultimately, the result is a fairly standard example of the limits of judicial review, the context is important and worthy of note.

In simple terms, if you are a landlord of housing that is built or converted with the benefit of public grant then you need to be a registered social landlord with the Regulator of Social Housing. Grant funding is, of course, quite limited these days and one of the things that has been knocking around since, oh, at least 2008 (Housing and Regeneration Act 2008) has been a general policy and legislative encouragement to try to get private sector bodies involved in social housing provision. Hence, if you want to, you can apply for voluntary registration with the Regulator.

Inclusion is one of those new entrants into the market. The idea behind the company is that it provides specialist supported housing for adults with physical disabilities of mental health needs and, *I think* claims to do so in such a way as to comply with the “exempt accomodation” provisions of the HB regs (there is a passing discussion about it in this UT(AAC) case). But the really interesting bit is that Inclusion decided not to become the freehold owner of its properties, rather, it leased the properties from the landlords (who are themselves investment funds) and then underlet the units to individual occupiers.

This arrangement troubled the Regulator. At various times, concern has been expressed about the extent to which the model depended on the current HB rules not changing and the terms of leases from the funds (length, no break clauses, no power to renegotiate if the market conditions changed) and, after initially accepting that Inclusion could be registered, the Regulator subsequently issued a Regulatory Judgment to the effect that the model was just too risky.

The JR failed. The Regulator had given adequate reasons for its decision. The risks that the Regulator had identified were realistic ones and not some “black swan” event or a worst case scenario. That was a view that the Regulator was entitled to come to on the basis of the evidence before it. The Regulator was not stopping Inclusion from trading, but was simply saying that there were issues of regulatory concern. Claim dismissed.