Social landlords must continually improve their governance and risk management if they are to stay resilient, RSH has warned in its latest Sector Risk Profile report, published today.
Social landlords have a crucial role in building more and better homes for people who need them. However, ongoing financial pressures, including making much-needed investment in existing homes, mean that there is little margin for error and trade-offs will be necessary, although the risks are not evenly distributed across the sector.
Some challenges come from within the sector, such as the record spend on improving the quality of tenants' existing homes, including work to address damp and mould, fire safety and other potential hazards, as well as preparing for the outcome of the revised Decent Homes Standard review.
There are also wider economic risks, including the increased cost of debt, a weaker housing market, as well as labour cost inflation and continued labour market shortages, which are contributing further to this low-headroom environment.
RSH says good governance will be essential to landlords navigating these challenges, underpinning both financial viability and their ability to provide better outcomes for tenants.
Boards and councillors should use robust data, spanning a wide range of business activity, to manage and mitigate strategic risks.
They should also be stress testing their business to ensure they can deal with external shocks as well as risks with tenants' homes, which could lead to financial issues over the longer term.
Fiona MacGregor, Chief Executive of the Regulator of Social Housing, says: "Ignoring the value of good governance weakens social landlords' resilience against risk.
"This is more important than ever, at a time when risks are intensifying and pressure is growing to deliver more and better social homes.
"Only by focusing on governance, informed by robust data and risk management processes, can landlords make the right strategic decisions and improve social housing in the long-term."
RSH will continue to use its range of regulatory tools, including our inspections, to ensure landlords are well-run, financially viable and able to provide more and better social homes.
Notes
The 2025 Sector Risk Profile sets out our view of the most significant sources of risk to landlords and their ability to deliver the outcomes of our standards.
By 'landlord', we mean a registered provider of social housing, including local authorities and private registered providers - such as non-profit housing associations, co-operatives and profit-making organisations. This publication draws on regulatory returns submitted by landlords and other data provided to us as the regulator.
Last year RSH started its proactive inspection programme for all large social landlords (those owning 1,000 homes or more). For housing associations and other private registered providers, our integrated inspections cover the economic and consumer standards. For local authorities, RSH's remit covers the consumer standards and rent standard. But, as our regulatory casework shows, many of the lessons relating to our regulation of governance should also be used by local authorities to improve outcomes for tenants.
