Housing providers invested £3.5 billion on new homes and £2.1bn on repairs and maintenance in the last quarter, the Regulator of Social Housing’s (RSH) latest quarterly survey of private registered providers’ financial health has revealed.

And the report, which covers the period 1 April to 30 June 2024, also shows that the country’s social landlords expect to spend a further £9.3bn over the next 12 months (up from £8.2bn in the same period last year).

Over the next year, they plan to spend a further £16.2bn on development (up from £14.2bn in the previous year), of which £11.7bn is contractually committed. Some providers are reviewing uncommitted development projects to mitigate risk.

The sector continued to attract private finance, with £2.3bn agreed in the quarter. Total cash and undrawn facilities reached £34.3bn, which is enough to cover forecast interest costs, loan repayments and development for the next year. The sector’s total agreed facilities reached £131.7bn at the end of June.

Providers continued to grapple with financial challenges in the quarter, the RSH says. 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.

Providers’ investment in building safety, repairs and decarbonisation continues to impact on their aggregate interest cover. Forecast interest cover (excluding all sales) stood at 79% – up marginally from 76% in the previous quarter but still one of the lowest levels recorded.

The RSH says it is continuing to monitor and engage with providers, particularly those that have a reliance on sales to support their cashflows.

Will Perry, Director of Strategy at the RSH, said: “Providers continue to build new homes for the future, while improving existing homes and services for tenants. This includes important priorities like fire safety remediation, tackling damp and mould, and decarbonising tenants’ homes.

“As a result, interest cover remains low and providers have limited financial headroom. It is vital that they have strong governance arrangements in place to identify, stress test and mitigate financial risks. We will continue to review providers’ finances, including through our annual stability checks this autumn, as well as our inspection programme.”

Commenting on the figures, Andy Hulme, Chief Executive of The Hyde Group, Andy Hulme, said: “This data shows social housing providers, including Hyde, are continuing to make record investment in repairs and improvements to customers’ homes.

“Last year, we invested more than £100m in customers and their homes, as part of our strategy to put customers at the heart of everything we do.

“The sector is currently facing billions of pounds of additional costs to tackle things like damp and mould, decarbonisation and building safety which are clearly the right things to do. Social housing providers are making these record investments despite almost a decade of cuts and below-inflation rent increases.

“Analysis by the G15 has shown large London housing associations alone have had to absorb £19bn in lost rental income as a result of the years of caps and cuts to social rents.

“We are pleased to hear reports that the government is planning to deliver a ten-year, index-linked rent settlement for social housing, but this must include rent convergence to make up for the impact of government rent policy changes in the last eight years.

“Currently, more than half of the 600,000 social homes provided by the G15 are loss making. We urgently need rent convergence to be reintroduced to make all social homes financially sustainable so that housing providers can invest even more money in repairing and improving the homes of our customers.”