RSH publishes quarterly survey for Q2 2023-2024
The Regulator of Social Housing has today published the results of its latest quarterly survey of registered providers’ financial health.
The Regulator of Social Housing has today (23 November 2023) published the results of its latest quarterly survey of private registered providers’ financial health.
The report covers the period from 1 July to 30 September 2023. It shows that providers are continuing to make record investment in new and existing homes while grappling with significant external economic pressures. This includes higher inflation and borrowing costs, as well as ongoing supply-chain issues.
Providers invested significantly in repairs and maintenance, with damp and mould repairs continuing to be a priority. Total revenue spend reached £1.2 billion in the quarter, which was 5% higher than forecast.
As a result, annual interest cover decreased again. Excluding all sales, rolling 12-month cash interest cover was 74% (compared to 78% in the previous quarter). Providers forecast that interest cover increases slightly to 76% over the next year. Despite this pressure, RSH continues to have assurance that the vast majority of PRPs are managing their lender interest cover positions.
Providers continued to build homes for the future, spending £3.7 billion on new development in the quarter. This was higher than the previous quarter but 18% below forecast. Providers ascribed the shortfall to operational delivery issues, as well as contractor insolvencies.
The sector’s total agreed borrowing facilities increased by £1.4 billion in the quarter, reaching a total of £125.3 billion. Providers are expected to draw a further £2.2 billion in debt over the next year from facilities that have not yet been agreed, which will be affected by higher interest rates.
Boards will need to consider the timing of future investment spend, as delays could leave providers exposed to higher interest costs on new or re-financed facilities.
Will Perry, Director of Strategy at RSH, said:
Social housing providers continue to operate in a very challenging economic climate, and they need to maintain a strong focus on risks and deploy mitigations when needed.
Providers must be prepared for further increases in interest payments and operating costs, particularly if they currently have high levels of cheap, fixed rate debt. Boards will want to make sure they don’t delay investment in new and existing homes while they manage their cash and covenant positions carefully.
RSH’s quarterly surveys are available on its website.
Notes to editors
- The quarterly survey provides a regular source of information about the financial health of private registered providers, in particular with regard to their liquidity position.
- The quarterly survey is based on the regulatory returns of 204 PRPs and PRP groups which own or manage more than 1,000 homes.
- RSH promotes a viable, efficient and well-governed social housing sector able to deliver and maintain homes of appropriate quality that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants.
- For press office contact details, see our media enquiries page. For general queries, please email enquiries@rsh.gov.uk or call 0300 124 5225.