Housing associations in England have achieved record levels of reinvestment into both new and existing homes despite facing significant economic pressures, according to the latest Value for Money report published by the Regulator of Social Housing (RSH) on 5 March 2026.

Record investment amid rising costs

The sector invested a total of £14.8 billion in capital expenditure, marking a historic high. This includes a 15% increase in reinvestment into existing homes, which rose to £3.8 billion as providers prioritise sustainable homes, stock quality, and building safety.

However, the operating environment remains challenging. Higher interest rates and increased costs, particularly related to building safety, have placed considerable financial strain on housing associations. This has forced many landlords to make difficult trade-offs, resulting in a decline in new supply, especially in non-social housing development. Despite this, the development of new social homes has remained relatively stable.

Regional disparities and sector challenges

The report highlights uneven pressures across the sector, with London landlords notably affected by higher building safety costs. These costs have constrained their capacity to fund new supply, contributing to London having the lowest proportion of social housing relative to its existing housing stock.

Financial metrics reflect these pressures. The weighted sector average EBITDA-MRI interest cover has fallen to 87%, although the median provider maintains a stronger cover at 113%, and the top quartile reaches 152%. Operating margins have also been squeezed, with the median overall margin at 17.4%, below the long-term average of 18.5%. Meanwhile, the sector’s headline cost per unit increased by 11% to £5,690, driven largely by maintenance, major repairs, and management expenses.

New home delivery and cautious outlook

Despite the economic uncertainty, housing associations delivered 53,330 new homes in the year, of which 48,548 were social housing. However, overall reinvestment into new homes fell by 4% to £11 billion, reflecting a more cautious approach amid policy and economic uncertainties.

The evolving role of Boards

The report stresses the importance of Boards adopting a more active and strategic leadership role. Boards are urged to ensure landlords fully understand their costs and deploy resources efficiently to meet their organisational objectives. They must intervene promptly when underperformance occurs and ensure corrective actions align with the landlord’s purpose.

Will Perry, Director of Strategy at RSH, commented: “While these are challenging times for some landlords, there is also greater certainty around policy for the sector to actively plan for the longer term. Boards must provide robust challenge where landlords are not making the most effective use of their resources to achieve the strategic objectives of the organisation.”

He added: “Landlords need to be open about how well they are delivering value for money and show evidence that they are meeting the requirements of the VFM Standard. This includes clear and transparent reporting in their accounts of their performance and setting out improvement plans where they have not delivered as intended.”

RSH will continue to monitor compliance through inspections and regulatory judgements, ensuring landlords provide evidence-based assurance of meeting the Value for Money Standard.

What this means for landlords

For landlords and agents, the report underscores the necessity of rigorous financial management and strategic planning. Understanding cost drivers and maintaining transparency in reporting are critical to demonstrating value for money to stakeholders and regulators alike.

Given the pressures on funding and rising costs, landlords must carefully balance investment between maintaining existing stock and developing new homes. The regional disparities highlighted, particularly in London, suggest that landlords in affected areas may need to adopt tailored strategies to manage building safety costs and sustain new supply.

Boards should actively engage in overseeing financial performance and operational efficiency, ensuring that resources are aligned with long-term objectives and regulatory expectations. This proactive governance will be essential in navigating the current economic challenges and securing sustainable growth.

Source: Based on reporting from Regulator of Social Housing

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