Social housing financial overview published

The Regulator of Social Housing (RSH) has published its 2024 Global Accounts, providing a financial overview of private registered providers of social housing for the year up to 31st March 2024.

Significant investment in existing homes has weakened the social housing sector’s financial position, which can also been seen through recent regulatory judgements. 

This past year, providers spent a record £8.8 billion on repairs and maintenance, which is £1 billion more (ten per cent increase) than last year, and £3.1 billion more (55 per cent increase) than the pre-pandemic level of £5.7 billion in 2020. Increased spending was motivated by a focus on improving tenants’ homes including fire remediation, building safety, and energy efficiency measures.

Housing providers also spent £15 billion on development for the year, a ten per cent increase on the £13.7 billion reported in 2023. 54, 000 new social homes were delivered this year, which is three per cent more than last year.

The sector’s continued robust liquidity in aggregate allowed providers to raise the necessary funds to invest in new and existing homes. The sector agreed new facilities, such as refinancing, of £12.5 billion in the year and reported undrawn facilities of £29.9 billion in March 2024.

Providers are also facing difficulties between maintaining financial resilience and also investing in new and existing homes, with many providers forced to scale back their development ambitions because of investment in existing homes. The total number of homes forecast to be completed in the next five years has decreased by 12 per cent, from 42,000 to 292,000.

Estimated spend on repairs and maintenance has increased by 11 per cent on last year’s plans and is now equivalent to £10 billion annual over the next five years.

Will Perry, director of strategy at RSH, said: “The sector as a whole has so far proven resilient as it grapples with competing financial pressures, managing to stabilise operating margins this year while investing record amounts on existing homes and building much-needed new homes.

“However, forecasts indicate this could become more challenging in the future as rising levels of debt and cost of capital, as well as sustained high levels of investment in existing stock, impact providers’ surpluses.

“As these challenges intensify, providers must monitor and mitigate risks, including alerting us of any material issues. We will take action if we have concerns about a landlord’s viability.

“We know that this continued close security is key to maintaining investor confidence, as well as protecting tenants and providing new homes across the country.”