Housing associations have achieved record levels of reinvestment in 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. The report highlights the sector’s resilience amid rising costs and financial challenges, while also emphasising the evolving role of boards in ensuring effective resource use.

Record investment amid rising costs

The housing association sector invested a total of £14.8 billion in capital projects during the past year, marking a record level of reinvestment. This includes a 15% increase in capital reinvestment into existing homes, which reached £3.8 billion. The focus on sustainable homes, improving stock quality, and enhancing building safety has driven much of this investment.

However, the sector has faced mounting pressures from higher interest rates and increased costs, particularly related to building safety. These challenges have forced many landlords to make difficult trade-offs in their investment decisions, resulting in a reduction in new supply, especially for non-social housing developments. Despite this, the development of new social homes has remained relatively stable.

Regional disparities and sector challenges

The report draws attention to uneven pressures across the sector, with some larger landlords experiencing more acute difficulties. London landlords, in particular, face higher building safety costs, which have impacted their broader business plans and reduced their capacity to fund new housing supply. This has contributed to London having the lowest level of social housing supply relative to its existing housing stock.

Financial metrics also reflect these pressures. The weighted sector average EBITDA-MRI interest cover has fallen to 87%, although most providers maintain stronger interest cover, with the median at 113% and the top quartile at 152%. Operating margins have been squeezed by persistent cost pressures, with the median operating margin standing at 17.4%, below the long-term average of 18.5%.

Costs continue to rise

The sector’s headline cost per unit increased by 11% to £5,690, outpacing general inflation. This rise is largely attributed to maintenance, major repairs, and management expenses. While investment in new homes remains substantial, there was a cautious approach during the year due to economic and policy uncertainties, leading to a 4% fall in reinvestment into new homes to £11 billion. In total, housing associations delivered 53,330 new homes, of which 48,548 were social housing.

Strengthening governance and accountability

The report emphasises the critical role of boards in providing strategic leadership and ensuring that landlords make the best use of their resources. Boards are urged to have a clear understanding of their organisation’s objectives and to intervene decisively where underperformance occurs. This includes ensuring that activities remain aligned with the organisation’s purpose and that corrective actions are taken when necessary.

Will Perry, Director of Strategy at RSH, stated: “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 that landlords provide evidence-based assurance of their value for money performance.

What this means for landlords

For landlords and agents, the report underscores the importance of strategic financial planning and transparent governance. With rising costs and economic uncertainty, it is vital to prioritise investment in existing stock and new developments carefully. Boards must actively oversee financial performance and ensure resources are deployed efficiently to meet both tenant needs and development goals.

Furthermore, landlords should prepare for increased scrutiny regarding value for money and be ready to demonstrate how their spending aligns with strategic objectives. Transparent reporting and proactive management of underperformance will be essential to maintaining regulatory confidence and supporting sustainable growth in the sector.

Source: Based on reporting from Regulator of Social Housing

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