Global accounts show record investment in social housing repairs despite problems
Social housing providers continued to invest significantly in existing homes to tackle issues like damp and mould, building safety and improving energy efficiency, the Regulator of Social Housing (RSH) said after publishing its global accounts for 2023.
Providers made record investment in repairs and maintenance, spending £7.7bn over the year to 31st March 2023 – 20% more than the preceding 12-month period.
Providers also continued to build much-needed new social homes for the future. Investment in new supply increased by 11% to reach £13.7bn. The number of new social homes built in the year increased to 53,000, 7% higher than the previous year.
RSH’s comments come despite well documented delays in fixing repairs and problems such as damp and mould in social housing, with providers sparked into action amid outrage over the death of two-year-old Awaab Ishak in 2020 from respiratory conditions caused by living in a mould-infested housing association flat.
The regulator said that providers faced significant economic challenges including higher inflation and borrowing costs. This led to the sector being stretched and providers’ financial resilience being tested. These trends have continued into the current financial year.
As a result of higher investment spend and challenging conditions in the wider economy, providers’ interest cover continued to fall. Aggregate interest cover excluding sales stood at 103%, the lowest since 2010. Interest cover has continued to fall in the current financial year.
RSH said it has assurance that the sector remains robust, but individual providers have less financial headroom and their capacity to absorb downside risk is reduced. This is reflected in RSH’s judgements, with the majority of providers now graded at V2 for financial viability.
Overall the sector continues to have strong liquidity and continued to attract private investment. Including refinancing, the sector agreed new facilities of £9.9bn in the year, increasing total available undrawn facilities to £30.3bn. Providers remain committed to future investment, with record spend on existing homes forecast again for the next year.
Will Perry, director of strategy at RSH, said: ‘Social housing providers are grappling with a range of major external economic pressures. At the same time, they are spending record amounts on improving their tenants’ homes and fixing problems like damp and mould.
‘Boards must remain clear-sighted about financial risks, and deploy appropriate mitigations, while building more and better social homes for people who need them.’
Image: Pavel Neznanov
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