Housing associations to borrow £42bn over next five years, regulator predicts

Comparing the forecast for the period 2021 to 2025 made last year and this year, total operating surplus in the sector is also down by £7bn, according the RSH’s data.

Financial returns from registered providers show them shifting away from reliance on market sales with receipts falling by £6bn compared to last year’s predictions. In contrast, the level of sub-market rent development expected over the period is consistent with projects from last year.

Total development over the five-year period is down by 7% relative to the forecasts from 2018/19 while “market-facing development” has crashed by 40%.

The regulator also anticipates turnover and margins to fall for low-cost homeownership sales and rent income to drop as a result of the COVID-19 pandemic.

This data shows total sector debt rising steadily each year from 2020 to 2025. Currently total sector debt stands at £82bn, according to the RSH.

Going forward the RSH said it will be considering how well providers are dealing with the coronavirus crisis, policy uncertainty from Brexit, the Planning White Paper and the changing Affordable Homes Programme regime.

Other areas of focus for the regulator include how they are responding to tenant and building safety issues, challenges brought by a new Decent Homes Standard and shifting to carbon-neutral housing.

A RSH spokesperson said: "The FFR data set is compiled from providers’ business plans and so reflects their intentions. As we highlight in our annual Sector Risk Profile publications, development and financing are key areas where providers need to understand the operating environment, adjust their plans and manage their risks effectively.”