Housemark analysis shows value for money in social housing is being reshaped by regulatory and safety demands

The report shows that financial resilience across the sector remains strong, with the majority of landlords continuing to operate within their loan covenant requirements and maintaining interest cover above minimum thresholds. However, this resilience is being tested, with median EBITDA MRI interest cover tightening to 111.9% in 2024/25 as spending priorities shift towards existing homes, building safety and regulatory compliance.

Operating Margins Stabilise but Remain Below Pre-Pandemic Levels

Our analysis also shows that median operating margins have stabilised year-on-year following several years of decline. While this points to a sector that has adapted to sustained cost pressure, margins remain significantly lower than pre-pandemic norms, having fallen from 24% in 2019/20 to 18.7% in 2024/25. This reinforces the need for careful prioritising and long-term planning.

Sector Adjusts to Constrained Environment and Rising Costs

The findings highlight a sector adjusting to a more constrained environment. Rising costs continue to outpace income growth, with median social housing costs per unit increasing faster than CPI inflation. Also, regulatory expectations are reshaping how boards and executives assess value for money. There is now greater emphasis on risk management, service quality and assurance rather than headline efficiency alone.

Value for Money Requires Increasingly Deliberate Trade-offs

We note that value for money is now increasingly about making deliberate trade-offs. Investment decisions are being guided by safety and compliance requirements alongside affordability and long-term sustainability, rather than a singular focus on cost reduction or growth.

Expert Insight from Our Chief Research Officer: Jonathan Cox, our Chief Research Officer, said

“Value for money in social housing has evolved. The data shows a sector that remains financially resilient, but one that is having to make far more careful and complex choices. As regulatory expectations increase, value is no longer about being the cheapest. It is about investing in safety, maintaining services and ensuring long-term sustainability while operating within tighter financial limits.”

Key Findings from the VFM Metrics Analysis Report 2024/25

• New supply delivery remains subdued, with median social housing completions standing at 1.30% of stock in 2024/25, down from 1.43% the previous year
• Median gearing reduced by 3% year on year among providers with consistent data, despite net debt continuing to rise across the sector
• Return on capital employed improved slightly, with the median ROCE increasing by 0.3 percentage points in 2024/25, and 59% of landlords reporting an increase
• We forecast sector costs to rise by around 5% by the end of 2025/26, exceeding CPI inflation but at a slower rate than the most recent year-on-year increase

Our Approach to Value for Money Analysis

Our Value for Money metrics analysis draws on financial and operational data from social landlords across the UK and is designed to support evidence-based decision-making at board and executive level.

Members get more: Full report and tailored insights

• Benchmark Performance: Compare your financial health and operational efficiency with peers nationwide using regulator‑aligned metrics.
• Make Better Strategic Decisions: Use insights on gearing, reinvestment, and return on capital to inform investment planning and resource allocation.
• Demonstrate Regulatory Confidence: Show compliance and organisational resilience with metrics aligned to the Regulator of Social Housing’s expectations.

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