Regulator of Social Housing to update approach to economic regulation

In an open call for evidence, More and better social homes, the RSH suggested that the social housing sector is “likely to remain under significant financial pressure over the next 5 to 10 years, so their governance and risk management must reflect the challenges they face”.

The Regulator said it wanted “to start a conversation with our stakeholders about the changes, challenges and tensions that exist in the social housing sector”.

The discussion document sets out the Regulator’s early thinking “about how we could future proof our economic regulation to help the sector deliver more and better social homes”.

The RSH said that in the decade since the last comprehensive review of its economic regulation, the social housing sector and the wider landscape in which it exists have changed substantially.

“The sector has continued to grow in scale and complexity. It provides more homes, including by new entrants like for-profit providers. Its structure has changed too. There are fewer large landlords but, due to mergers and development, these landlords are bigger.”

The RSH pointed to the sector’s delivery of new homes as well as its significant investment in existing homes, partly in response to the Grenfell Tower fire.

The discussion document said: “Doing this has squeezed the sector’s resources. And the wider economic context has added further pressure. This includes the major upheavals of the coronavirus pandemic, as well as global political instability and the economic shocks that followed, particularly higher rates of inflation and borrowing costs.

“The sector remains attractive to investors with £140bn in borrowing facilities available to landlords. But these headwinds, combined with higher spending needs within the sector, have placed significant pressure on the sector’s finances. As a result, margins are more than a third lower than they were 10 years ago. There have been more cases of landlords in financial distress being rescued by others. Together with the wider trend of mergers, this has led to the concentration of more homes among fewer landlords.”

RSH said it could look to strengthen accountability and outcomes by:

• setting clearer expectations,
• using better data to target risks early,
• taking a more focused, adaptive regulatory approach, aimed at driving efficiency, resilience, and long-term protection of social housing.

The RSH acknowledged that its standards for governance, financial viability and value for money only apply to housing associations and other private registered providers, and so many of the ideas it has put forward in the discussion document are only relevant to these social landlords.

“However, we consider that the ideas we are putting forward about enhancing our regulatory approach could apply equally as well to regulating our consumer standards and the rent standard as they do to our regulation of governance, financial viability and value for money. This means that they are of interest to all social landlords, including local authorities.”

RSH Chief Executive Jonathan Walters said: “Our focus is simple: a more efficient, financially resilient social housing sector – and a modern regulator that drives it.

“We want landlords who invest for the long term, improve safety and quality, manage risk, and deliver more and better homes for current and future tenants.

“We are inviting a sector-wide conversation on the challenges ahead and how regulation can better support the delivery of more and better social homes for the future.”

The RSH asks those interested to engage with three prompts.

The first of these ‘Discussion Prompts’ asks for stakeholder’s views on how the RSH can further promote the essential characteristics of social landlords to deliver more and better social homes.

The second prompt requests views on how the RSH can further drive landlord accountability in the delivery of more and better homes, and the third on the regulator’s intention to become increasingly targeted in its regulatory approach.

The RSH asks for any written contributions to be submitted by 30 September 2026 via an online survey.

Harry Rodd