The key requirement for exempt accommodation is that the housing must be provided by a regulated provider — a registered social landlord, a housing association that is a registered charity, a voluntary organisation, or a local authority — to residents who require and receive care, support, or supervision from the accommodation provider as a condition of their tenure. A standard private landlord acting alone is not a regulated provider and cannot provide exempt accommodation. Private landlords who wish to access the supported housing market must either partner with a regulated provider (who nominates residents and provides the support, leasing the property from the landlord), or take the significant step of becoming a registered provider of social housing themselves.
The exempt accommodation sector has faced significant regulatory scrutiny following DLUHC investigations that found poor-quality providers operating inflated HB schemes without providing meaningful support. The Supported Housing (Regulatory Oversight) Act 2023 introduces a new local authority oversight regime, compliance notices, and financial penalties — making the regulatory environment for supported housing significantly more demanding from 2024 onwards.
Who can provide exempt accommodation and what the care/support/supervision requirement means
The regulated provider requirement and the care/support/supervision standard are the two central gateways to exempt accommodation status — both must be satisfied:
- Regulated provider requirement — who qualifies: To provide exempt accommodation, the landlord/accommodation provider must be one of the following types of organisation: (a) Registered Provider of Social Housing (RP) — an organisation registered with the Regulator of Social Housing (RSH) under the Social Housing (Regulation) Act 2023 (formerly registered under the Housing Act 1996 Part 1 — the register has been maintained by the RSH since 2012). Registered providers include large housing associations (G15 members and smaller regional associations); community land trusts; almshouses; and specialist supported housing providers. Becoming a registered provider requires a formal application to the RSH, demonstration of financial viability, and compliance with the RSH's Regulatory Standards — a demanding and time-consuming process for new entrants; (b) Housing association that is a registered charity — a charitable housing association that is not itself registered with the RSH may still qualify as an exempt accommodation provider if it is a registered charity with the Charity Commission; (c) Voluntary organisation — a voluntary sector organisation (not-for-profit; unincorporated association; charity; Community Interest Company) that provides housing-related support to vulnerable people. A CIC (Community Interest Company) can qualify as a voluntary organisation for exempt accommodation purposes if it can demonstrate non-profit distribution and public benefit; (d) County council or district council acting in its capacity as a housing authority. Critically: a standard private landlord (whether individual or a limited company) is NOT a regulated provider in its own right and CANNOT provide exempt accommodation directly. A private landlord who wishes to access the exempt accommodation market must either: (i) lease their property to a regulated provider (RSL or voluntary organisation) on a management lease, with the regulated provider sublet to and supporting the end residents — the landlord is the property owner; the regulated provider is the exempt accommodation provider; (ii) partner with a regulated provider who nominates residents and provides the support, with the landlord receiving a guaranteed rental income from the regulated provider (often below market rent but above LHA, with the regulated provider receiving a higher HB payment from the resident); or (iii) incorporate a vehicle (CIC or charity) that itself becomes a registered or qualifying voluntary organisation provider, with the landlord as the property owner leasing to their own CIC/charity provider
- Care, support, or supervision — the 'more than minimal' standard: The second gateway to exempt accommodation status is the care, support, or supervision requirement. The Housing Benefit Regulations 2006 (as amended) specify that exempt accommodation residents must be in receipt of 'more than a minimal amount of care, support or supervision' provided by the accommodation provider. The key elements are: (a) Provided or arranged by the accommodation provider — the care, support, or supervision must be provided (or at minimum arranged) by the same entity that provides the accommodation. Support provided by an entirely separate organisation with no connection to the landlord does not qualify the accommodation as exempt. The classic model is that the regulated provider employs support workers who visit the property regularly and provide structured support to residents; (b) Linked to tenure (conditions of accommodation) — the support must be a condition of the resident's accommodation. If the resident withdraws from the support, the accommodation provider can (and should) terminate the accommodation. If the support is entirely optional and has no effect on the resident's housing, it is not sufficiently linked to tenure to qualify; (c) More than minimal — the 'more than minimal' standard requires meaningful, structured, regular support. What this means in practice: a weekly support worker visit of 1-2 hours minimum with a structured support plan; regular key worker sessions; life skills support; help with benefit claims; crisis intervention; accommodation condition monitoring. A brief telephone call check-in; a quarterly visit; or nominal 'floating support' without a structured support plan does not meet the 'more than minimal' standard. The local authority Housing Benefit team will assess whether the support meets this standard when processing the HB claim — and poorly evidenced support is a common reason for HB to be paid at LHA rather than the higher exempt accommodation rate
HB claim process, UC interaction, Supported Housing Act 2023 and practical landlord steps
Understanding the HB assessment process and the new regulatory framework is essential for landlords considering or already operating in the supported housing market:
- HB claim and eligible rent assessment: The Housing Benefit claim for an exempt accommodation resident follows a specific assessment process: (1) The resident (or the provider on their behalf) makes an HB claim to the local authority. For Universal Credit (UC) claimants, supported housing residents are subject to a transitional protection — they continue to claim HB (not UC) for their housing costs, preserving access to the exempt accommodation HB regime rather than being limited by the LHA-based UC housing cost element. This transitional protection has been maintained for exempt accommodation and supported housing since UC rollout began; (2) The local authority Housing Benefit team assesses the eligible rent — the rent that HB will be paid on. For exempt accommodation, this is based on the actual rent charged (not LHA), subject to a reasonableness test. The local authority can: (a) accept the rent as reasonable without additional assessment; (b) refer the rent to the Rent Officer for an opinion on reasonableness; or (c) commission a 'Registered Valuer' report on the reasonableness of the rent charged (particularly where the rent appears significantly above local market levels — a common occurrence in supported housing); (3) If the local authority is satisfied that: (a) the provider is a regulated body; (b) the resident is receiving more than minimal care/support/supervision from the provider; and (c) the rent is not unreasonably high — HB is paid at the eligible rate without LHA capping. Direct payment to the provider (rather than the resident) is typically agreed for vulnerable residents, providing income certainty for the provider and landlord. Overpayment risk: if the local authority later determines that the exempt accommodation criteria were not genuinely met (e.g., the 'support' was nominal; the provider was not a genuine regulated body), it can recover overpaid HB from the provider
- Supported Housing (Regulatory Oversight) Act 2023 and practical landlord steps: The Supported Housing (Regulatory Oversight) Act 2023 (Royal Assent November 2023) represents the most significant regulatory development for the exempt accommodation sector since the Housing Act 1996. Key provisions: (a) Local authority oversight powers: local authorities can issue compliance notices to supported housing providers who fail to meet national licensing standards (to be developed by the RSH); financial penalties for persistent non-compliance with national standards; publication of enforcement actions; (b) National licensing standards: the RSH is developing national standards for supported housing — all exempt accommodation providers will be expected to meet these standards. Local authorities can refuse to pay HB at exempt accommodation rates to providers who do not meet the standards; (c) Local authority review powers: local authorities have enhanced powers to investigate and review whether exempt accommodation criteria are genuinely met, and to recover overpaid HB where criteria were not met. Practical steps for private landlords considering the exempt accommodation market: (a) Do not attempt to set up an 'exempt accommodation scheme' without genuinely qualifying as a regulated provider — local authorities and DLUHC are actively investigating and prosecuting false exempt accommodation schemes; (b) If using a management lease with a regulated provider: conduct thorough due diligence on the regulated provider (are they genuinely registered with RSH or the Charity Commission? Do they have a track record of genuine support delivery?); (c) Ensure the management lease terms are commercially sound — the regulated provider should bear the risk of HB claim success and the cost of support delivery; (d) Maintain records of all support delivered to residents — support worker logs; resident key worker notes; support plans. This evidence is essential if the local authority questions the exempt accommodation status; (e) Ensure the property meets the applicable housing standards for the resident group — supported housing residents are often among the most vulnerable tenants, and property condition standards are higher than for standard BTL
Frequently asked questions
Can I, as a standard private landlord, provide exempt accommodation and receive HB above the LHA cap?+
Not directly. Exempt accommodation requires the provider to be a regulated body — a registered social landlord, a housing association that is a registered charity, a voluntary organisation, or a local authority. A standard private landlord (individual or limited company) is not a regulated provider. To access the exempt accommodation market, you can: (1) lease your property to a genuine regulated provider (e.g., a registered housing association or voluntary organisation) who then provides exempt accommodation to residents; or (2) set up a CIC (Community Interest Company) or charitable organisation that qualifies as a voluntary sector regulated provider — a significant step requiring genuine support delivery infrastructure.
What support needs to be provided for a scheme to qualify as exempt accommodation?+
The resident must receive 'more than a minimal amount' of care, support, or supervision — provided or arranged by the accommodation provider — as a condition of their tenure. In practice this typically requires: regular key worker sessions (minimum 1-2 hours per week of meaningful, structured support); a written support plan; life skills support; help with benefit claims and managing accommodation; crisis intervention. Support provided by a completely separate organisation with no connection to the landlord does not qualify the accommodation as exempt. Brief phone-call check-ins or nominal floating support without a structured plan does not meet the standard.
What does the Supported Housing (Regulatory Oversight) Act 2023 mean for landlords?+
The 2023 Act introduces new powers for local authorities to issue compliance notices and financial penalties to supported housing providers who do not meet national licensing standards (being developed by the Regulator of Social Housing). Local authorities have enhanced powers to investigate whether exempt accommodation criteria are genuinely met and to recover overpaid HB. The Act is designed to tackle 'rogue' supported housing providers who collect HB at above-LHA rates without providing genuine support. Legitimate providers who deliver genuine care/support/supervision to genuinely qualifying resident groups, and who are genuine regulated providers, should not be adversely affected — but evidence of support delivery is now more important than ever.
Do exempt accommodation residents receive Housing Benefit or Universal Credit for their housing costs?+
Exempt accommodation residents are subject to a transitional protection from Universal Credit rollout — they continue to claim Housing Benefit (not the UC housing cost element) for their accommodation. This protection has been maintained since UC rollout began and preserves access to the exempt accommodation HB regime (uncapped by LHA) rather than the LHA-based UC housing cost element. Local authorities process HB claims for exempt accommodation residents in the normal way, regardless of whether the resident is otherwise on UC for other benefit elements.
- Local Housing Allowance — LHA caps and claimant tenants →
- Universal Credit — direct payment to landlord and managed payments →
- Selective licensing — local authority licensing schemes →
- HMO licensing — mandatory licence conditions for houses in multiple occupation →
- Co-living — purpose-built shared accommodation and planning →
- Housing disrepair — tenant claims and landlord repair obligations →