The Regulator of Social Housing has released its latest Sector Risk Profile, mapping out where it sees the biggest challenges for housing associations and local authorities over the coming year.

The report shows that providers face substantial financial pressures, with high inflation and a proposed rent cap both mentioned.

To combat this, the regulator says: “To maintain financial resilience, providers need to continue responding appropriately to the changing conditions.

“Boards and councillors will need to have a clear sense of their priorities and make trade-offs. They must ensure that their mitigating actions are strategic and timely, underpinned by stress testing and robust planning, and communicated effectively to stakeholders.”

But it is not just on the financial side that the regulator is warning that there are risks ahead.

Highlighting the need to continue to prioritise tenant safety and key services, the regulator says that investment in existing homes “must be underpinned by robust data on stock condition, a clear understanding of policy changes in these areas, and properly engaging with and listening to tenants.”

The report adds: “Boards will also need to recognise that delaying investment in existing stock could increase cost pressures over the long term and damage the sector’s reputation.”

On development, which many housing associations and local authorities have publicly admitted will have to be slowed down considerably, the report says that landlords “will need to consider carefully how to assess new development, ensuring that risks are tightly managed, including investment in market-sale homes which could affect providers’ core social housing business.”

Fiona MacGregor, Chief Executive at RSH, said: “Providers must take a strategic approach to managing the significant risks we have identified in our Sector Risk Profile and act appropriately to maintain their continued financial viability. Boards and councillors are the custodians of people’s homes, and it’s absolutely vital that tenants’ homes, safety and the delivery of essential landlord services are not put at risk.”