Global Accounts reveal increasing financial pressure for social housing providers

Commenting on the 2024 Global Accounts of private registered providers published today, John Guest, national head of social housing and partner at RSM UK, said: “The latest Global Accounts paint a picture of further challenge to finances of those operating in the social housing sector. We’re continuing to see the demand for affordable housing outpacing supply, putting further pressure on social landlords to deliver more homes and improve existing stock, with social rent increases remaining limited.

“But, more encouragingly, the data shows that private registered providers (RPs) invested heavily in both new and existing housing stock, spending a record £8.8bn, up 13% on the previous year, despite facing higher interest rates and repair costs. This reflects RPs are committed to improve their stock and provide tenants with safe and efficient housing. We can also see some stabilisation of operating margins, however these still remain at historically low levels (17%) and any respite in inflationary costs have been offset by record repair bills. Higher interest rates caused further constraint, with interest costs rising by £0.6bn to £4.4bn.” 

He added: “The knock-on effect of enhanced financial pressures means that many RPs are scaling back on their development plans, which will have broader implications for the government’s mandatory housing targets. Last year saw the delivery of 54,000 new social homes, which falls significantly below the government’s aims over the next five years. The sector requires major investment, but it’s still uncertain how much government funding will be readily available. This will be felt more acutely as organisations start to feel the impact of increases to employers’ NIC. It is therefore important RPs continue to manage their exposure to financial risk, whilst protecting existing stock at the same time.”