Housing providers are continuing to invest record amounts in existing homes, the results of the Regulator of Social Housing’s (RSH) latest quarterly survey have revealed.

Spend on repairs and maintenance totalled £2.1 billion in the quarter, with providers spending a total of £8.4 billion in the year to September. A further £9.6 billion is forecast for the next 12 months.

Providers also invested £3.2 billion on building and acquiring new homes (down from £3.5 billion in the previous quarter). Over the next year, they plan to spend a further £15.6 billion on development (a marginal drop of 3% from the previous quarter’s forecast).

While cash balances remain at historically low levels, investment in the sector remains robust, with £3 billion of new finance arranged in the quarter, the RSH says.

Total cash and undrawn facilities reached £34.5 billion, which is enough to cover forecast interest costs, loan repayments and development for the next year. The sector’s total agreed facilities reached £131.9 billion at the end of September.

According to the RSH, social landlords are constrained by competing spending priorities – specifically the twin challenges of building new homes for the future while making investment to tenants’ homes.

Although inflation and interest rates have both fallen, the cost of borrowing continues to be a challenge for providers who are coming out of low fixed-priced contracts or loans.

Cash interest cover (excluding sales) is forecast to drop to a record low of 70% over the next year due to a projected rise in spending on repairs, maintenance and high interest costs.

However, outturn interest cover figures can fluctuate on a quarterly basis and interest cover increased to 110% for the three months to September as a result of a number of one-off factors and some providers reporting delays on planned repairs expenditure.

Will Perry, Director of Strategy at the RSH, said: “Providers are continuing to invest record amounts in existing homes, including on critical health and safety priorities such as fire safety and damp and mould.

“Many landlords are grappling with tighter financial headroom but the sector overall is still continuing to build new homes for the future.

“Effective financial governance and cashflow management is essential to enable landlords to avoid difficulties and continue to deliver for their current and potential tenants.

“These quarterly surveys, alongside our inspection programme and annual stability checks, play a vital role in our scrutiny and financial regulation which is key for maintaining confidence in the sector.”