Housing associations have achieved record levels of reinvestment in 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 Amidst Economic Challenges

The report reveals that housing associations invested a total of £14.8 billion in capital across new and existing homes, marking a historic high. This surge in investment comes despite ongoing financial challenges, including rising interest rates and increased costs associated with building safety and maintenance.

Capital reinvestment into existing homes alone rose by 15% to £3.8 billion, reflecting a growing focus on sustainable housing, improving stock quality, and ensuring safety standards. However, the sector has had to make difficult decisions, often prioritising investment in existing stock over new supply, particularly in non-social housing developments.

Impact of Regional and Sectoral Pressures

The report highlights that pressures are not evenly distributed across the sector. Larger landlords have reported specific difficulties, and regional disparities are evident. London, for example, faces higher building safety costs, which have constrained landlords’ capacity to fund new housing supply. This has contributed to London maintaining the lowest proportion of social housing relative to its existing housing stock.

Despite these challenges, the development of new social homes has remained relatively stable, with the sector delivering 53,330 new homes in total, of which 48,548 were social housing. However, overall reinvestment in new homes fell by 4% to £11 billion, reflecting a cautious approach amid economic and policy uncertainties.

Financial Performance and Cost Pressures

The sector’s financial metrics show mixed results. The weighted sector average EBITDA-MRI interest cover—a measure of financial resilience—has fallen to 87%. Yet, most providers perform better than this average, with the median provider at 113% and the top quartile at 152% interest cover.

Operating margins, which include social housing activities, remain under pressure due to persistent cost increases. The median operating margin stands at 17.4%, below the long-term average of 18.5%. Meanwhile, the sector’s headline cost per unit rose by 11% to £5,690, driven primarily by maintenance, major repairs, and management expenses. Although this increase outpaces general inflation, it is at a slower rate than in previous years.

The Role of Boards in Strategic Leadership

The report underscores the evolving responsibilities of housing association Boards, emphasising the need for more active and strategic leadership. Boards must ensure that landlords fully understand their costs and deploy resources effectively to meet their objectives. Where underperformance occurs, Boards have a duty to intervene and implement corrective actions to realign activities with the organisation’s purpose.

Will Perry, Director of Strategy at RSH, commented: “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. This requires a clear understanding of what the organisation is intending to achieve, in both serving existing tenants and developing new homes, and how it maximises its efficiency and effectiveness in doing so.”

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 their value for money performance.

What this means for landlords

For landlords and agents, the report highlights the importance of strategic financial management and transparency. Understanding cost drivers and maintaining robust oversight can help landlords navigate economic pressures while continuing to invest in quality housing. The emphasis on Board accountability also signals a need for clear governance structures to support sustainable growth and compliance with regulatory standards.

Moreover, regional variations in costs and supply challenges, particularly in London, suggest that landlords must tailor their strategies to local market conditions and regulatory environments. Maintaining a balance between reinvestment in existing stock and new development will be crucial to meeting tenant needs and sector objectives.

Source: Based on reporting from the Regulator of Social Housing

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