The Regulator of Social Housing's (RSH) 2025 Sector Risk Profile was published today, marking a shift in tone and purpose. Following the implementation of the new regulatory and inspection regime in April 2024, this year's profile signals a clear change: from setting expectations to enforcing them. Boards of registered providers of social housing (RPs) are now firmly in the spotlight, with the RSH making it clear that RP Boards are primarily responsible for meeting the challenges ahead and that dropping below regulatory expectations will not be accepted.

We know that the economic and regulatory climate has deteriorated further since last year. Financial viability across the sector continues to weaken. EBITDA MRI interest cover fell to 91% in 2024/25, with recovery not expected until 2027/28. This is the lowest level since 2009 and reflects the compounding pressures of higher cost inflation, rising debt costs and continued increased investment in existing stock. The sector has now surpassed £105 billion in drawn debt, and many RPs face the need to refinance legacy low-interest debt at materially higher rates.

At the same time, repairs and maintenance investment continues to rise, driven by the need to address building safety, damp and mould, and broader decency standards. The RSH highlights that many landlords are operating in a low-headroom environment, leaving little margin for error. This has led to a reduction in planned development spend, with forecasts for new homes down 6% compared to 2024, which itself was a 12% drop on 2023 planned development spend. As if we need any reminding, the sector needs to make difficult trade-offs between maintaining existing homes and delivering new supply.

Compounding these financial pressures are new and evolving regulatory obligations. The phased implementation of Awaab’s Law, new electrical safety regulations, the forthcoming Competency and Conduct Standard and the introduction of Minimum Energy Efficiency Standards will require additional investment and planning. 

Throughout the 2025 profile, governance emerges as the central theme. The RSH is unequivocal: boards are ultimately responsible for managing risk, ensuring compliance and delivering safe, decent homes. Good governance is no longer an implicit assumption; it is the foundation upon which financial viability, tenant safety, and service quality rest. Boards must demonstrate robust oversight, data-driven decision-making, and a proactive approach to risk management.

The 2025 profile is ten pages shorter than its predecessor. This is not a sign of reduced scrutiny—it perhaps reflects a more focused and robust approach. The RSH appears to be delivering a short and clear message: the regulatory environment is tightening and RPs should not expect an easy ride. There will be regulatory enforcement where standards are not met and boards must be prepared to account for their decisions and performance.

In this challenging climate, the sector needs to continue to drive cultural and operational change. Well-informed and engaged boards will know the questions to ask to test this. The risks are real, the expectations are high, and the regulator is watching.

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Please contact Peter Hubbard.