Landlords’ average spend on social homes jumps 14% as inflation bites

“This demonstrates the sector’s continued focus on the quality and safety of homes,” the report said. 

Since 2021, the study found that more than 70% of the increase in the overall headline cost of operating a social home was related to maintenance and major repairs.

It comes as landlords have faced increasing scrutiny following media reports uncovering appalling conditions in social homes, as well as a string of shocking findings by the Housing Ombudsman and the fall-out from the death of two year-old Awaab Ishak due mould in a housing association flat.

The higher price for building materials and costs related to building safety and making homes more energy efficient also contributed to landlords’ increased spending.

The study, which sits alongside the regulator’s global accounts published in December, also reiterated the difficult financial situation providers have been facing.

EBITDA MRI (Earnings Before Interest, Tax, Depreciation, Amortisation, Major Repairs Included) interest cover – which shows the sector’s ability to cover ongoing finance costs from operating activities – fell to 128% on average in the sector. This was the lowest level since 2010. 

The global accounts had revealed that on a weighted average, EBITDA MRI had slid to 103%, which was also the lowest figure since 2010. 

Will Perry, director of strategy at the RSH, said: “Housing associations are grappling with a range of economic challenges while working to provide more and better social homes for people who need them.

“This creates competing pressures on their finances, and boards need to explain how they are allocating their resources and adding value. Our report allows stakeholders to scrutinise their landlord’s performance and hold them to account across a range of areas.”