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RSH report: landlords spent almost 3% less per home last year
Social landlords spent almost 3% less per home in 2020-21, largely due to a drop in repairs and maintenance spend during the pandemic, a report from the English regulator has found.
According to the Regulator of Social Housing’s (RSH) annual Value for Money report, the median ‘headline social housing cost’ for landlords in 2020-21 was £3,730 per home, which is 2.7% less than the figure for 2019-20.
Meanwhile the mean headline social housing cost per unit fell by 2.3% to £4,150
The headline social housing cost figure is calculated by dividing landlords’ spend on things such as maintenance, repairs and neighbourhood services by the total number of social homes they own.
It is a key metric used by the regulator when analysing value for money,
In its latest annual for money report, the regulator said the drop in the headline social housing cost figure was largely due to a fall in repairs and maintenance spend during the pandemic.
The report said works to existing social properties in nominal terms fell from £1.9bn in 2020 to £1.6bn in 2021.
However, the RSH said that by the third quarter of the financial year, capitalised major repairs and maintenance had exceeded pre-pandemic levels.
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The RSH publishes its Value for Money report so that boards and a wide range of stakeholders, including tenants, can assess performance on these metrics and see how providers compare with other organisations.
It highlights the challenges that the pandemic posed for the sector and reinforced the importance of good-quality data-driven performance monitoring, alongside clear objective setting, to mitigate risks to providers’ businesses, the regulator said.
Additional data in the report revealed that reinvestment in new and existing social housing stock was 5.8% of the total value of existing stock in 2020-21, compared with 7.2% in 2019-20.
The sector invested £9.5bn in new supply and existing stock in 2021, compared to £12.2bn in 2020.
But the regulator pointed out that the survey showed that providers are already delivering capital investment programmes to catch up works that were delayed by the pandemic.
The RSH said the debt-based value for money measures reflect the sector’s strong financial capacity.
The weighted average earnings before interest, taxes, depreciation and amortization (EBITDA) interest cover increased by 13 percentage points compared with previous years as a result of the return of permitted consumer price index +1% rent increases and lower operating expenditure.
Meanwhile, gross debt also increased by 3.4% to £85.9bn compared with previous years.
The weighted average gearing metric, however, reduced by 0.5% to 47.2% due to the impact of higher property valuations outweighing the impact of additional debt raised during the year.
Fiona MacGregor, chief executive of the RSH, said: “Despite significant challenges, registered providers have maintained essential services, attracted investment and maintained their financial resilience.
“As the sector faces greater scrutiny, it is fundamental in the context of value for money that scarce resources are used effectively and efficiently, decisions are made on a sound basis, and stakeholders understand how those decisions were made.”
Additional research by the regulator published earlier this week found that investment in development and acquisition has soared to the highest level on record for the period from 1 October to 31 December 2021.
Update: at 12.16pm, 28.02.22 This story has been updated to include the mean headline social housing cost figure. The original version of this story called the median figure the ’average’ figure.
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