FG18/6: Helping tenants find alternatives to high-cost credit and what this means for social housing landlords

Open consultation: CP18/12
31/05/2018
Consultation closed
31/08/2018
Finalised Guidance: FG18/6
18/12/2018
18/12/2018

We have published final guidance for registered social landlords to provide greater clarity about the activities for which they are likely to require authorisation as credit brokers.

Show FG18/6 (PDF)

Show CP18/43 (PDF)

In CP18/12 on high-cost credit, we said that local authorities and registered social landlords (RSLs) could play an important role in helping tenants find essential household goods and less expensive forms of credit with which to buy goods.

There are many things a landlord can do to help. Depending on who the landlord is and the circumstances, some will not be credit broking and will not fall within the scope of financial regulation. An RSL referring tenants to credit providers, credit brokers and providers of goods on hire is, however, likely to be credit broking.

As a regulated activity, credit broking requires authorisation from us. This is also true for private landlords and all other persons wanting to carry out credit-related regulated activity.

However, you will not need authorisation if you are an exempt person, such as an appointed representative of an authorised person, or your activity is covered by a relevant exclusion, for example the exclusion for local authorities. There are also some types of credit which are not caught by credit broking, in particular some types of shorter term interest-free credit.

To support and encourage RSLs to help tenants by referring them to lower cost credit providers like credit unions and community development finance institutions (CDFIs), and to providers of goods on hire, we consulted in CP18/12 on draft non-Handbook guidance.

We have finalised the guidance on the basis of the feedback sent to us in response to our consultation. We summarise the feedback we received and set out our responses in Chapter 5 of CP18/43.

The final guidance:

  • helps to clarify the types of activities for which RSLs are likely and not likely to require authorisation from us
  • sets out the options of authorisation or acting as an appointed representative
  • explains that we have set up a specialist team to help RSLs assess whether they require authorisation for their activities, or for those they may want to carry out, and provides a dedicated email address for queries
  • gives an overview of the authorisation process

The guidance forms part of our work to foster alternatives to high-cost credit.

Who this applies to

This guidance applies to providers of social housing that are registered with the relevant housing regulator in England, Scotland, Wales or Northern Ireland. As slightly different terminology is in use across the UK, we refer to these collectively in this guidance and related policy documents as registered social landlords or RSLs.

It may also be of interest to credit unions, CDFIs and other organisations interested in helping consumers to access alternatives to high-cost credit.