17 December 2024
John Guest, national head of social housing and partner at RSM UK, comments: “As we look ahead to 2025, the social housing sector is poised to face a range of challenges, but also some opportunities. The demand for affordable housing continues to outpace supply, putting increased burden on social landlords to deliver more homes and improve existing stock, meanwhile social rent increases remain limited. The rise in National Insurance contributions will also add financial pressure and reduce revenue.
“However, with government spending set to accelerate economic growth to almost 2% in 2025, as outlined in our latest Quarterly Economic Outlook, this will ease some financial constraints for social landlords. Economic growth will encourage investment to maintain existing stock and for new developments. In addition, government is currently consulting on reforms to make the “Right to Buy” scheme fairer and more sustainable, with reforms aiming to protect social housing stock and ensure that homes sold under the scheme are replaced.
“While this is a step in the right direction, the shortage of social housing is expected to persist, with the supply and demand imbalance likely leading to longer waiting lists and further pressure on social landlords to innovate and meet the UK’s housing needs. Some of these tensions could be alleviated by modern methods of construction, and the adoption of technology over the next year will be crucial to address challenges including labour shortages. Modular building could also help to reduce costs and speed up delivery of new homes, which in line with government’s mandatory housing targets, will support social landlords managing tight margins.
He added: “But there are further regulatory complexities to consider which are not yet clear, including community-led development proposals to deliver social housing for local communities referenced in last week’s National Planning Policy Framework. It’s also uncertain how much government funding will be readily available. Moving into the new year, organisations need to tread carefully, with collaboration between social landlords, local authorities and private sector partners key to addressing the housing crisis. However, industry must also take the front foot and embrace new technologies to improve productivity, encourage innovation and deliver new homes.”

