UK Construction and Law
Housing associations forecast 16bn pounds of development in a year while quarterly interest cover falls to 59 per cent
By Staff Writer | 7 September 2026
The regulator's quarterly survey for April to June 2026 shows landlords borrowing freely and planning more building, with 5.1bn pounds of uncommitted development the highest in three years. Repairs spending keeps climbing and interest cover keeps falling.
The Regulator of Social Housing published the survey on Thursday 3 September 2026. It is built from the regulatory returns of 195 private registered providers and groups that own or manage more than 1,000 homes, and it is the document the regulator uses to spot a landlord whose twelve-month liquidity or loan covenants are at risk. For the contractors and consultants who build and repair those homes, it is the nearest thing to a forward order book the sector publishes.
Money is available
Total agreed borrowing facilities rose by 1.4bn pounds in the quarter to 144.5bn at the end of June, of which 110.6bn was drawn. Forty-six providers arranged new finance totalling 4.3bn pounds, against an average of 3.4bn a quarter over the last three years; seventeen of them arranged facilities of 100 million pounds or more, and one arranged more than 400 million. Bank lending was 51 per cent of the new money, at 2.2bn, and capital markets 31 per cent, at 1.3bn. At the end of June, 99 per cent of providers forecast that their facilities would cover twelve months or more.
Cash balances fell 16 per cent in the quarter to 3.4bn pounds and are forecast at 3.2bn by June 2027, with 72 per cent of providers expecting a net cash outflow over the period. Loan drawdowns of 10.6bn are forecast over the next twelve months, 3.3bn of them from facilities not yet agreed.
Repairs up, development steady, forecasts rising
Spend on repairs and maintenance was 2.4bn pounds in the quarter, 8 per cent below the previous quarter but 10 per cent above the same quarter a year earlier. Over twelve months it reached 9.7bn, 6 per cent higher than the year to June 2025 and 18 per cent higher than the year to June 2024, and the forecast for the next twelve months is 11.1bn.
Development spend was 3.1bn pounds in the quarter, against 3.4bn in the quarter to June 2025 and 3.5bn in the quarter to June 2024, and 13.1bn over the year against 13.6bn the year before. The forward view is stronger: the twelve-month development forecast rose to 16.0bn from 15.1bn in March, the fifth consecutive quarterly increase, and includes 5.1bn of uncommitted development, up 16 per cent and the highest level in three years. Forecast development grant fell 9 per cent to 2.7bn.
As the operating environment continues to evolve, landlords should ensure their plans adapt to emerging opportunities and changes in regulation.
Will Perry, Director of Strategy at the Regulator of Social Housing
The number the regulator watches
Quarterly cash interest cover excluding sales, but including grant for capitalised major repairs, stood at 59 per cent. Strip out the grant and it was 49 per cent, down from 87 per cent in March, a fall the regulator attributes mainly to large annual invoices such as insurance premiums landing in the quarter. Rolling twelve-month interest cover excluding grant slipped to 76 per cent from 79, with the median at 86 per cent from 92. The forecast for the next twelve months is 73 per cent including grant and 64 per cent without, down from 67 because forecast interest payable has risen.
Sales were weak. Affordable home ownership completions fell 38 per cent to the lowest level in six years and market sale completions halved to the lowest in more than ten years, although non-social housing sales produced 1.1bn pounds, the highest ever recorded, driven by one large private rented sector disposal. The overall margin on asset sales was 8 per cent, the lowest since reporting began.
The survey notes the first allocations under the 39bn pound Social and Affordable Homes Programme 2026 to 2036, announced on 25 August, rent policy of CPI plus 1 per cent for ten years from April 2026, and rent convergence from April 2027. The regulator says it will keep engaging with the financially weakest providers on how they manage risk. For a contractor pricing a repairs framework or a development partnership, the survey says two things at once: the money is there, and the margins of the people paying it are thinner than they were.