RSH publishes its quarterly survey for Q2 2024
The report covers the period 1 July 2024 to 30 September 2024.
The Regulator of Social Housing (RSH) has today (21 November 2024) published the results of its latest quarterly survey of private registered providers’ financial health.
Providers continue to invest record amounts in existing homes, with spend on repairs and maintenance totalling £2.1 billion in the quarter. In the year to September they spent a total of £8.4 billion, with a further £9.6 billion forecast for the next 12 months.
Providers also invested £3.2 billion on building and acquiring new homes (down from £3.5 billion in the previous quarter). Over the next year, they plan to spend a further £15.6 billion on development (a marginal drop of 3% from the previous quarter’s forecast).
While cash balances remain at historically low levels, investment in the sector remains robust, with £3 billion of new finance arranged in the quarter.
Total cash and undrawn facilities reached £34.5 billion, which is enough to cover forecast interest costs, loan repayments and development for the next year. The sector’s total agreed facilities reached £131.9 billion at the end of September.
Social landlords are constrained by competing spending priorities – specifically the twin challenges of building new homes for the future while making much-needed investment to tenants’ homes.
Although inflation and interest rates have both fallen, the cost of borrowing continues to be a challenge for providers who are coming out of low fixed-priced contracts or loans.
Cash interest cover (excluding sales) is forecast to drop to a record low of 70% over the next year due to a projected rise in spending on repairs, maintenance and high interest costs.
However, outturn interest cover figures can fluctuate on a quarterly basis and interest cover increased to 110% for the three months to September as a result of a number of one-off factors and some providers reporting delays on planned repairs expenditure.
RSH continues to monitor and engage with providers, particularly those that have a reliance on sales to support their cashflows.
Will Perry, Director of Strategy at RSH, said:
Providers are continuing to invest record amounts in existing homes, including on critical health and safety priorities such as fire safety and damp and mould.
Many landlords are grappling with tighter financial headroom but the sector overall is still continuing to build new homes for the future.
Effective financial governance and cashflow management is essential to enable landlords to avoid difficulties and continue to deliver for their current and potential tenants.
These quarterly surveys, alongside our inspection programme and annual stability checks, play a vital role in our scrutiny and financial regulation which is key for maintaining confidence in the sector.”
Notes to editors
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The report is based on the financial regulatory returns from 201 private registered providers (housing associations and other PRPs, including for-profits), who own or manage more than 1,000 homes.
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Through its annual stability checks, RSH considers whether each provider’s current viability grade is consistent with the information contained in their regulatory returns. RSH focuses on indicators of financial robustness and evidence of any significant changes in risk profile.
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RSH promotes a viable, efficient and well-governed social housing sector able to deliver more and better social homes. It does this by setting standards and carrying out robust regulation focusing on driving improvement in social landlords, including local authorities, and ensuring that housing associations are well-governed, financially viable and offer value for money. It takes appropriate action if the outcomes of the standards are not being delivered.
For general enquiries email enquiries@rsh.gov.uk. For media enquiries please see our Media Enquiries page.