The Supported Housing (Regulatory Oversight) Act 2023 represents the most significant reform to the supported housing sector in a generation. With the Government's response to its implementation consultation now published, providers need to understand what is coming – and start preparing.
What does the 2023 Act do?
The 2023 Act created a framework for the regulation of supported housing in the UK. Its primary focus is "Supported Exempt Accommodation" (SEA) – the classes of accommodation that are eligible for Housing Benefit (HB) at above Local Housing Allowance levels under the Specified Accommodation rules.
The Act has three principal strands. It established a Supported Housing Advisory Panel, including a range of sector representatives, to advise key stakeholders on supported exempt accommodation and to help address current and emerging issues within the sector. It also requires local authorities to publish Local Supported Housing Strategies, addressing current and future need for supported housing in their areas – with the first strategies due by 31 March 2027 and updates required at least every five years. Most significantly, it gave the Secretary of State powers to introduce National Supported Housing Standards and a licensing regime requiring those managing SEA to obtain a licence from local housing authorities, with compliance with the Standards as a licensing condition.
The consultation and Government response
The Government ran a consultation on implementation between February and March 2025, covering the proposed National Supported Housing Standards, the proposed new licensing regime, the definition of care, support and supervision in Housing Benefit terms, and proposals for a specific planning use class for supported housing. The Government's response, published in April 2026, summarises feedback from over 500 responses.
The response confirmed that all SEA and not just exempt accommodation will be subject to the licensing regime, with the statutory definition of specified accommodation mirrored in the Housing Benefit regulations to avoid any gaps between the two. The proposed National Supported Housing Standards are built around five key principles – person-centred, respectful, safe and responsive, effective, and well-led with seven specific standards to be enforced as licensing conditions. Licence fees will be recoverable from Housing Benefit, resolving a key question on additional cost risk for providers.
On the fit and proper person test, the outcome of the consultation is that this has been expanded and will align more closely with the CQC equivalent, requiring licensing authorities to assess whether the licence holder is a person of integrity, good character and with relevant skills and experience. Where an organisation is the licence holder, the board must nominate an individual director to hold that role. On the contentious question of defining "care, support and supervision" for Housing Benefit purposes, the Government has decided not to introduce a new definition or thresholds at this time, meaning the existing body of Tribunal caselaw will continue to apply.
Key considerations for landlords and care providers
Several issues warrant close attention as the regime develops:
- Licensing and Housing Benefit linkage. Many supported housing models rely on Housing Benefit paid above Local Housing Allowance levels, and the proposed link between licensing and Housing Benefit entitlement creates a significant cliff-edge risk to service viability. Providers must plan for this linkage and the possible implications for themselves and of course for the people they support.
- Who holds the licence? In many cases a managing agent will be the appropriate licence holder, which will require a fundamental rethink of the contractual obligations between landlords and managing agents – particularly where the landlord relies on Housing Benefit to service its operating costs.
- Local need standard. The local need standard carries a risk of inconsistent approaches across local authorities, and without an appeals mechanism tailored to the licensing regime, challenges may ultimately fall to judicial review. Providers should watch closely for further detail in the draft regulations.
- Fit and proper persons. Licence holders will be required to ensure that service managers – those responsible for the day-to-day running of supported housing – have the character, capacity, experience and skills to deliver that role. Governance arrangements will need review.
- CQC interaction. A CQC inadequate rating will not be a basis for rejecting a licence application; the licensing condition will simply require that where care is provided, the care provider is CQC registered. This is a welcome clarification.
What happens next?
Draft licensing regulations and a further consultation are anticipated later in 2026, with full commencement of licensing unlikely before 2027 given the need for further consultation, drafting and local authority readiness. The window to engage with the detail remains open, and now is the time for landlords and care providers to assess their structures, contracts and governance arrangements.
If you would like to discuss how the 2023 Act and its implementation may affect your organisation, please contact our team.
