Regulator of Social Housing financial forecasts show interest cover stabilising across sector

The Regulator of Social Housing’s  latest survey of housing associations’ financial forecasts indicates that the sector’s financial position may be beginning to stabilise.

Interest cover, which measures the degree to which interest on outstanding debt is covered by operating earnings, had previously been declining in each successive set of forecasts for a number of years.

But the 2026 financial forecasts of private registered providers, published Tuesday, showed the aggregate level of interest cover over the first five years of RPs’ plans was broadly in line with the year prior.

The report put the aggregate forecast for years one to five at 107%, compared with 106% in 2025 and 114% in 2024.

“Key factors influencing this appear to be a slowing rate of increase in repairs and maintenance expenditure combined with increased income growth,” said the report.

“The latest set of forecasts indicate that in aggregate, the financial position of the sector may be beginning to stabilise.”

The report also showed a modest increase in development plans for the five years of plans, reversing the trend of recent forecasts. The sector is forecasting completion of 285,000 homes over five years, a 4% increase on the previous set of plans but still below the amount forecast in 2024.

The increase in planned development has also seen a larger increase in debt in this set of plans than has been seen in recent years.

The total sector debt drawn and repayable is set to reach £133bn by 2031, an increase of 7%.

Financial forecast returns are collected from all RPs owning and/or managing more than 1,000 social homes. This year, 195 individual providers made filings, most of which were submitted in June 2026.

Will Perry, director of strategy at RSH, said it was encouraging to see landlords preparing to invest record amounts in repairs while maintaining their ambition to build more affordable homes.

He said: “The sector’s long-term ambition is clear: more investment in existing homes, more new homes and more for social rent. These are not easy trade-offs, and the financial pressures need to be managed really carefully.

“Our job is to make sure landlords are alert to the risks and have the transparency, resilience and strategic focus needed to navigate them while delivering for tenants.”