Regional analysis
An insight into the difference between performance across regions in England with a key focus on reinvestment, new supply delivery and headline cost measures.
Applies to England
Documents
Details
Contents
- Regional overview
- Reinvestment
- Reinvestment (per unit)
- New supply
- New supply (social)
- Headline social housing cost
- Return on capital employed
Regional overview
The analysis for 2023 is based on 198 private registered providers (2022: 200 providers). The region which a provider is allocated to is defined as the region in which 50% or more of its total social homes owned are based (providers who have less than 50% of their social homes in any one region are defined as mixed providers). Providers in the North West own 17% of England’s social housing homes while the East Midlands own only 3% of social housing homes. Mixed providers own 26% of all social housing homes.
Number of providers
% of social homes owned
Regional overview accessible data table
Reinvestment
Assessing the overall picture of reinvestment performance at a regional level is complex and is sensitive to the cyclical nature of providers’ asset management strategies. It is also sensitive to the average property value for a region - the denominator of the metric which can inflate or deflate a region’s overall outturn. The North-East region has the lowest average property value of £33,479 per unit but has the highest median reinvestment as a proportion of the value of existing homes of 8%. In London, reinvestment is lowest owing to average property values which are high when compared to other regions.
In the North-West region, the median reinvestment as a proportion of the value of existing homes is 7.7%. Its relatively high performance is driven by the proportion of LSVTs less than 12 years old (60%) that operate from within the region.
Reinvestment component and average property values by region 2023
Reinvestment component and average property values by region 2023 accessible data table
Reinvestment (per unit)
The London region has the highest reinvestment per unit both in existing homes and development of new homes of £6,570. There is evidence to suggest that this is partially driven by higher-than-average labour costs*. While reinvestment into existing homes per unit may be influenced by the proportion of social homes in each region, in London it is also likely due to a higher number of homes in buildings with over 6 storeys when compared to other regions in England**.
The South East, South West, and East Midlands have the lowest spend per unit on existing homes. This could be explained by stock age - a relatively high proportion of homes** in these regions were built post 2001.
Yorkshire and the Humber has the lowest spend per unit on development and Other (£1,730), which broadly aligns with the relatively low number of new homes delivered in the region as set out under New supply (social), regional analysis.
*ONS, 2023, Annual estimates of paid hours worked and earnings for UK employees. Annual gross pay for full time employees in ‘skilled trades occupation’, ‘Skilled construction and build trades’ and ‘Elementary trades and related occupations’
**Statistical Data Return 2023
Reinvestment per unit (£k)
Reinvestment (per unit) accessible data table
New supply
Private registered providers in London, the South-East and Mixed regions delivered almost half of the sector’s new supply social homes and three quarters of the new supply non-social homes.
New supply (social) % (weighted average) and number of new units
New supply (non-social) % (weighted average) and number of new units
New supply accessible data table
New supply (social)
Regions in the north of England generally have lower levels of new social supply as a percentage of total social housing units owned: North East, 1.0%, North West 1.3% and Yorkshire and the Humber 1.1%. This is likely influenced by the Affordable Homes Programme (AHP)* and related capital funding for new homes in areas of low affordability, largely the South East, South West and East of England. Equally, it’s likely due to demand for social housing when compared to other regions. For example, in the North East we would expect to see less demand as rents in this region are closest to market rent**. In the North West the small increase of new social supply of 0.2 percentage points is influenced by a small number of providers in the region. The largest increase in new supply, both in absolute terms and as a percentage of total social units, is in the South East. This is driven by an increase in new supply (social) by three large providers.
*AHP, Capital Funding Guide, Housing for Rent, Social rent
**RSH, 2022-23, Private registered provider social housing stock in England - rents profile 2022-23
New social supply as a % of total social units owned, by region (weighted average)
New supply (social) accessible data table
Headline social housing cost
On average the HSHC per unit increased by 11% across all regions in the year. This is generally in line with high inflation of 10.1% (CPI)* experienced over the period to March 2023.
Similar to previous years’ outturn, the region with the highest HSHC per unit is London (£7,218) while the region with the lowest HSHC is the North East (£4,062).
The regions where headline costs increased most include the North West (15%) to £4,475, East Midlands (16%) to £4,353 and Yorkshire and Humber (16%) to £4,507. These regions did not experience any significant change in owned units ( the denominator of the metric) - the increase therefore is solely related to an increase in costs.
*Consumer Price Index Table 1, ONS, December 2023.
Headline Social Housing Cost (HSHC) – cost per unit 2022 to 2023 (median)
Headline social housing cost accessible data table
Return on capital employed
ROCE fell on average by 0.3 percentage points across most regions between 2022 and 2023 except for the South-West which increased to 3% and Yorkshire and Humber. In Yorkshire and the Humber, ROCE increased to 2.4% due to the high operating surplus of 13% which was driven by most large providers in the region.
Return on capital employed by region
