The Housing SORP working party has published the draft SORP 2026: Statement of Recommended Practice for registered social housing. We are now in a 12-week period of consultation during which stakeholders have until 12 January 2026 to submit their comments. The SORP working party has provided more details on the consultation process on its website.

The Housing SORP is being updated to reflect changes in the revised FRS 102 (published in September 2024), focusing on aligning revenue recognition and lease accounting with International Financial Reporting Standards (IFRS). The SORP working party has also taken this opportunity to address some broader issues facing the sector and has sought to improve consistency through additional guidance.

Let’s take a closer look at the proposed new changes.

What are the headline changes to Housing SORP 2026?

There are a number of high-profile changes to the SORP, with the following four changes particularly relevant.

Updated income recognition requirements

The draft Housing SORP aligns the income recognition process with the five-step model outlined in FRS 102 Section 23. The new rules will include income from service charges which will be classified as income with contracts from customers but exclude grant income, which is classified as a non-exchange transaction under FRS 102. Specifically, this will fall under Sections 24 Government Grants and Section 34 Specialised Activities. Rental income will follow the requirements of Section 20 Leases.

Updated requirements for leases

A new model for lease accounting has been proposed, which serves as the introduction of the capitalisation of right-to-use assets on the balance sheet for the majority of leases. Exceptions are available for short-term leases and leases of low-value assets.

The SORP working party also identified the following areas for specific consideration for social landlords:

• Operating vs finance leases.
• Peppercorn or nil consideration leases contracts.
• Lessor disclosures.
• Non-lease components (service charges).
• Shared ownership.

Registered providers will need to understand the implications of these changes on their financial statements and covenant reporting requirements.

Enhanced narrative reporting requirements

Chapter 4 of the current SORP requires all social landlords with over 5,000 homes in management to prepare a strategic report. The new SORP proposes reducing this to over 1,000 homes, helping to provide more transparency and consistency across the larger registered providers.

Topical accounting issues

The SORP working party has also sought to provide more clarity on some sector-specific reporting challenges. There is proposed guidance for:

• Regeneration schemes: further guidance has been provided on regeneration schemes, aiming to create greater consistency of accounting treatment across social landlords.
• Capitalisation of costs: additional clarity has been provided for meeting building safety requirements, sustainability and decarbonisation targets.
• Non-compliance with laws and regulations: extra consideration has been given to future costs arising from cases of non-compliance with laws and regulations, such as decarbonisation, building safety and the Decent Homes Standard. This guidance is to provide greater clarity on whether a provision should be recognised, when and at what value.

How can you prepare for the new Housing SORP?

Once the consultation period is over, the finalised SORP will be published in the autumn ready to implement in periods beginning on or after 1 January 2026. For March year ends, the new SORP will need to be applied for the year ending 31 March 2027.

For further advice on how to prepare for these changes, you can read our Preparing for change: countdown to January 2026 guide. If you would like to discuss the updated SORP and explore ways to improve your inhouse processes, get in touch with John Guest, Kerry Gallagher or your usual RSM contact.

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