Join us every fortnight when we'll be taking a look at the UK housing headlines making the rounds. Breaking down the key information and giving you our thoughts!
Record level of spending on major repairs by private social housing providers
Private social housing providers in England have seen a record increase in costs for major repairs, reaching £3.3B in the year to March 2024, in comparison to £2.8B the previous year.
This surge in spending, allocated to building safety, fire safety, and energy efficiency measures, reflects the continous challenges providers face in maintaining and upgrading housing stock. Overall, repair and maintenance expenditure was £8.8B, while investment in new developments rose by 10%, totalling £15B. Despite these efforts the number of homes completed increased by just 3%, while forecasts for future completions decreased by 12%
The Regulator of Social Housing (RSH) acknowledged the sector's resilience but warned of growing financial pressures, including increased debt and capital costs, which could undermine providers' ability to continue investing in both repairs and new homes. While immediate concerns about providers collapsing are not foreseen, the RSH emphasised the importance of careful financial management and risk minimisation.
As challenges escalate, providers are urged to notify the regulator of any significant issues to maintain tenant protection, investor confidence, and continued housing development.
Lumensol Says: "Increased investment into existing homes is a positive step for the sector and their customers improving the condition and safety of the homes they manage. However, this comes at a cost and the trade-off could mean that fewer social housing homes will be built due to the re-balancing of debt and capital costs. The increasing cost of building new housing and the reducing grant will likely reduce the number of truly social homes delivered and exacerbate the homelessness crisis."
Anna Benbow - Principal Consultant, Asset Management Services
The key issues facing social housing providers in 2025
The UK Government has set a target to build 1.5M new homes by 2029, with 2025 expected to be crucial for the social housing sector. Key developments include the introduction of a new Affordable Homes Programme following the Spring Spending Review, alongside the release of a long-term housing strategy which is aimed at tackling affordability and accelerating delivery.
Regulatory changes such as Awaab's Law, a new rent settlement, and an updated Decent Homes Standard will also shape the sector's approach. Meanwhile, initiatives like the Remediation Acceleration Plan seek to address safety issues such as unsafe cladding, though resource and funding constraints remain significant challenges.
Social housing providers face mounting pressures, including stricter energy performance standards, building safety obligations, and rising costs such as increased National Insurance contributions. To address these challenges, public-private partnerships and new funding tools like the National Wealth Fund are expected. Local authorities, backed by £1B, will re-enter housebuilding, while innovative housing models like co-living and charity-funded homes will play a growing role in meeting demand.
Lumensol Says: "The Government's target to build the much-needed 1.5M new homes by 2029 will be a challenge for the sector to deliver due to competing priorities, and the challenges we already face. For the sector to succeed, we will need to balance speed and quality of delivery, factoring in energy performance and safety, alongside affordability. This will only be achieved through sharing best practice, collaboration, and shared learning. I am excited to see how the move towards innovative housing models unfolds in the next few years, and the role these will play in meeting the growing housing demand."
Vicky Fordham-Lewis - Director of Operations, Transformation Services