RSH publishes its quarterly survey for Q1 2024-25
The latest quarterly survey of private registered providers’ financial health covers the period 1 April to 30 June 2024
The Regulator of Social Housing (RSH) has today (5 September 2024) published the results of its latest quarterly survey of private registered providers’ financial health. The report covers the period 1 April to 30 June 2024.
Providers continued to invest significantly in repairs and maintenance, spending £2.1 billion in the quarter. They expect to spend a further £9.3 billion over the next 12 months (up from £8.2 billion in the same period last year).
Providers also invested £3.5 billion on building and acquiring new homes (up from £3.1 billion in the previous quarter). Over the next year, they plan to spend a further £16.2 billion on development (up from £14.2 billion in the previous year), of which £11.7 billion is contractually committed. Some providers are reviewing uncommitted development projects to mitigate risk.
The sector continued to attract private finance, with £2.3 billion agreed in the quarter. Total cash and undrawn facilities reached £34.3 billion, which is enough to cover forecast interest costs, loan repayments and development for the next year. The sector’s total agreed facilities reached £131.7 billion at the end of June.
Providers continued to grapple with financial challenges in the quarter. Although inflation and interest rates have both fallen, the cost of borrowing continues to be a challenge for providers who are coming out of low fixed-priced contracts or loans.
Providers’ investment in building safety, repairs and decarbonisation continues to impact on their aggregate interest cover. Forecast interest cover (excluding all sales) stood at 79% – up marginally from 76% in the previous quarter but still one of the lowest levels recorded.
RSH continues to monitor and engage with providers, particularly those that have a reliance on sales to support their cashflows.
Will Perry, Director of Strategy at RSH, said:
“Providers continue to build new homes for the future, while improving existing homes and services for tenants. This includes important priorities like fire safety remediation, tackling damp and mould, and decarbonising tenants’ homes.
“As a result, interest cover remains low and providers have limited financial headroom. It is vital that they have strong governance arrangements in place to identify, stress test and mitigate financial risks. We will continue to review providers’ finances, including through our annual stability checks this autumn, as well as our inspection programme.”