Increased repair and remediation costs highlighted by regulator of social housing as acceleration plan continues

[edit] Record levels of repair and maintenance

The latest annual publication of the Global Accounts of Private Registered Providers was published on 9 January 2025. It provides an annual summary of the financial status of social housing providers who own or manage at least 1,000 homes. Below are some key points from this summary with reactions from the regulator of social housing, along with previous reports on the progress of building remediation and the most recent government plan for accelerating progress.

Substantial investment in existing homes has weakened the sector’s financial position, which can also be seen in a number of recent regulatory judgements. Providers spent a record £8.8bn on repairs and maintenance, 13% (£1bn) more compared to the previous year and 55% (£3.1bn) above the pre-pandemic level of £5.7bn reported in 2020. This increased spending was driven by a focus on improving tenants’ homes including fire remediation, building safety and energy efficiency measures.

Providers also reported spending £15bn on development for the year, a 10% increase on the £13.7bn reported in 2023 and greater than the previous pre-pandemic peak. 54,000 new social homes were delivered this year, an increase of 3% on the previous year. The sector’s continued robust liquidity in aggregate allowed providers to raise the necessary funds to invest in new and existing homes. The sector agreed new facilities, including refinancing, of £12.5bn in the year and reported undrawn facilities of £29.9bn in March 2024.

While the sector’s operating margin (excluding fixed asset sales) remains at historically low levels, it stabilised slightly in the year to 17%. However, high levels of investment combined with weaker financial performance have impacted on the level of cash and short-term investments held by the sector, which decreased for the third year in a row to £5.5bn. The underlying surplus (excluding movements in fair value) fell again from £2.2bn to £1.6bn.

Providers are facing difficult trade-offs between maintaining financial resilience and investing in new and existing homes, with many providers scaling back their development ambitions due to investment in existing homes. The total number of homes forecast to be completed in the next five years has fallen by 42,000 (12%) to 292,000. Projected spend on repairs and maintenance has increased by 11% on last year’s plans and is now equivalent to £10bn per annum over the next five years.

[edit] The Regulator of Social Housing responds figures

Will Perry, Director of Strategy at RSH, said

“The sector as a whole has so far proven resilient as it grapples with competing financial pressures, managing to stabilise operating margins this year while investing record amounts on existing homes and building much-needed new homes. However, forecasts indicate this could become more challenging in the future as rising levels of debt and cost of capital, as well as sustained high levels of investment in existing stock, impact providers’ surpluses. As these challenges intensify, providers must monitor and mitigate risks, including alerting us of any material issues. We will take action if we have concerns about a landlord’s viability. We know that this continued close scrutiny is key to maintaining investor confidence, as well as protecting tenants and providing new homes across the country.”

[edit] Previous issues with target dates and transparency

On 4 November, 2024 the National Audit Office (NAO) published a report 'Dangerous cladding: the government’s remediation portfolio', that highlighted issues with cladding remediation programmes, transparency and target dates. This followed publication of the final Grenfell Inquiry in September, which examined the root causes of the fire in June 2017 that resulted in the deaths of 72 people. In the report the NAO examined how well MHCLG was maximising the identification of unsafe buildings and driving progress with remediation works.

The report had two key recommendations, saying the government should publish a target date for ending cladding remediation works, and should provide greater transparency on remediation performance. It highlighted that up to 60% of buildings with dangerous cladding had not at that time yet been identified, and that the remediation of buildings within government’s portfolio was slow. MHCLG modelling indicated an end date of 2035 for the completion of cladding remediation, but without any published milestones, it leaves hundreds of thousands of residents with no idea when their building will be made safe.

The report highlighted that most leaseholders were at that point protected from remediation costs, but residents often continue to suffer significant emotional and financial distress. With a total estimated costs of £16.6bn and the Building Safety Levy yet to start, the report highlighted the risks of keeping taxpayer contributions capped at £5.1bn.

[edit] One portfolio with programmes

The NAO, the UK’s independent spending watchdog noted that the recommendations in its report, were in effect the first report on government remediation since, the five programmes were brought together into a single portfolio in 2023.

The types of schemes described in the report along with a description and progress so far included were

The NAO report also describes the Government delivery partners in some detail including the Regulator of Social Housing (RSH). Others described include the Building Safety Regulator (BSR), the Joint Inspection Team (JIT), the Fire and Rescue Authorities, Homes England, Greater London Authority Health and Safety Executive (BSR), and Local Authorities.

[edit] Accelerating the remediation of buildings

In response to the NAO report from 4 November 2024, on 2 December the government published its plan for response to the recommendations in their 'Policy paper - Remediation Acceleration Plan' published 2 December 2024. This policy paper highlights the problem of the barriers to making buildings safe at pace as including:

• Landlord reluctance – significant numbers simply not taking measures to assess and remediate buildings.
• Constrained regulatory capacity – enforcement officers are too stretched; expertise is too scarce when compared with the scale of the challenge in many areas; and the enforcement framework can be cumbersome.
• Social housing providers capabilities and access to funding vary – some making faster progress than others. Barriers to greater pace include capacity, access to funding, capability and lengthy cost-recovery processes.
• Developer inconsistency and third-party disputes – some developers are making faster progress than others. Barriers to greater pace include disputes between developers and freeholders over access to buildings and scope of works, quality of assessments, insufficient focus or delay to securing necessary regulatory approvals.
• Skilled professionals – the supply chain of skilled professionals able to meet the sector’s demands is delicate. Contractor capacity for remediation work may need attention if rates of remediation increase rapidly.
• Resident experience – the experience of remediation needs to be improved; it can be miserable and makes residents feel unsafe. Insurance costs can be unaffordably high. Residents are not heard loudly enough.

In its policy paper the government sets out an approach to tackling the issues for buildings in England, recognising the scale and importance of the challenge, with a further update being due in summer 2025 to report on progress and on the second phase of spending. It states that the approach would deliver 3 core objectives:

• Objective 1: fix buildings faster - with any of the highest risk buildings known to us, they must be remediated at pace, while also taking action to get newly identified buildings fixed more quickly than in the past.
• Objective 2: identify all buildings with unsafe cladding - still a long way to being confident that all buildings with unsafe cladding have been identified. The government must work urgently to identify all buildings at risk.
• Objective 3: support residents - Some residents, including leaseholders, face crippling bills and other difficulties whilst waiting for remediation. Residents and leaseholders must be better supported during the process.

Through its plan the government has stated its aim is to have all 18m+ (high-rise) buildings with unsafe cladding in a government funded scheme to have been remediated by the end of 2029 . As well as every 11m+ building with unsafe cladding to have been either remediated, or have a date for completion, or the landlords will be liable for severe penalties.

The first two sections section of this article were published via Press Release as 'Social housing providers' finances impacted by rising repairs and remediation spend' dated 9 January, 2025.

[edit] Related articles on Designing Buildings

• Accountability.
• Accountable person.
• Accelerating the remediation of buildings with unsafe cladding in England.
• ACM cladding.
• Building Safety Act.
• Building Safety Regulator.
• Cladding Assurance Register CAR.
• CDM
• CIOB reacts to Government's Developer Remediation Contract announcement.
• Cladding remediation programmes, transparency and target date.
• Duty holder.
• Fire.
• Government building safety remediation data releases.
• Government response to the Building a Safer Future consultation.
• Grenfell articles.
• Grenfell Tower Fire.
• Grenfell Tower index.
• Hackitt review of the building regulations and fire safety, final report.
• Health and safety file.
• Housing (Cladding Remediation) (Scotland) Act 2024.
• Non-ACM cladding.
• Principal accountable person.
• Principal contractor.
• Protecting tenants and leaseholders from unsafe cladding.
• Radical action to speed up removal of unsafe cladding.
• Responsible Actors Scheme RAS.
• Responsible Developers Scheme RDS.
• Roof terraces and higher-risk buildings.
• RSH publishes latest fire safety remediation report for English social housing.
• The Cladding Safety Scheme and the Building Safety Fund.
• The Housing (Cladding Remediation) (Scotland) Bill 2023.
• The importance of digitising data to support cladding remediation and facilitate safer housing
• What the political party manifestos say on housebuilding and building safety.
• Why construction SaaS is a cladding remediation game-changer.

[edit] External links

Social housing providers' finances impacted by rising repairs and remediation spend' dated 9 January, 2025.

Dangerous cladding: the government’s remediation portfolio' published 4 November, 2024

'Policy paper - Remediation Acceleration Plan' published 2 December 2024