Some housing associations are pausing and removing uncommitted development, according to the regulator 

Housing associations have reduced their development forecasts and are pausing or cancelling schemes because of the current economic uncertainty, data released today has shown.


Social housing providers spent 17% below the £4.6bn forecast for the last quarter of last year on development, the quarterly survey from the Regulator of Social Housing revealed. 

For the next 12 months, housing associations expect to spend £16.6bn on new properties, a reduction of 4% on the last quarter’s forecast for the year ahead, which was £17.3bn. This means that forecast development expenditure is at its lowest level in two years, the survey of 203 social housing providers in England pointed out.

More than half of providers have reduced their forecast development, with some pausing or removing uncommitted development, the regulator’s report indicated. This was due to the current economic climate and ongoing challenges in the sector.  

However, the amount they actually invested in development in the quarter was £3.8bn, which was higher than the previous quarter, when it was around £3bn. It was also above the average quarterly expenditure spent on development over the last three years, of £3bn. the survey found they also invested 7% more than the £3.6bn they had contractually committed to spend on schemes. 

“Development schemes continue to be delayed due to supply chain issues affecting availability of materials and labour, and market volatility has resulted in prolonged contract negotiations,” the quarterly document stated. 

Most of the reduction in forecast development came from one provider reducing their 12-month expected development spend, which accounted for more than 40% of the overall decrease, the regulator explained. 

The figures comes after a period in which housing associations looking to develop have battled rising build costs and difficulties sourcing materials. In the previous quarter of last year, between July and September, providers spent 15% less than expected on developing new homes.

Between April and June last year they spent £2.9bn on development, which was 14% below the £3.3bn they had told the RSH they were contractually committed to invest and 33% below the total forecast expenditure. In the final quarter of the 2021 calendar year, housing associations spent 23% less than expected on development, as they battled supply chain problems and planning delays.

The latest update said spending on the acquisition and development of housing properties in the whole of 2022, of £12.6bn, was broadly similar to the year before - when it was £12.5bn. 

Providers spent £1.7bn on repairs and maintenance in the quarter, which was 8% above the previous quarter. Market sales totalled £497m in the three months, which was lower than the quarterly average achieved over the last three years of £0.6bn. 

Will Perry, director of strategy at RSH, said: “Social housing providers continue to attract private finance and invest heavily in new and existing homes. But they are facing significant economic headwinds which, combined with higher spend on repairs, are impacting on the sector’s finances.

“Providers need to take a strategic approach to managing these risks, so they can continue to deliver their objectives and ensure that their tenants are living in safe, good-quality homes”.