What’s new in the Regulator of Social Housing's Sector Risk Profile 2025?

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Social Housing's Sector Risk Profile 2025

21 November 2025
TagsPublic & social sectorInsights
The Regulator of Social Housing (RSH) has released its 2025 Sector Risk Profile (SRP), an annual review of the most significant risks facing social housing providers in England. We explore what’s changed since the 2024 SRP and outline key considerations for Boards and Leadership Teams as they navigate an increasingly complex operating environment.

Overview

The RSH’s Sector Risk Profile is an annual report designed to help social housing providers anticipate challenges, strengthen governance, and ensure delivery of safe, decent, and affordable homes in a rapidly changing environment.

What are the key themes?

Social landlords are grappling with mounting challenges as they balance quality, safety, and supply against economic headwinds. In the report, there are several critical risk areas:

  • Economic pressures: Rising costs for debt, labour, and materials, and a weaker housing market.
  • Governance and data: Strong governance and reliable data are essential for informed decision-making and risk mitigation.
  • Building safety: Fire safety remediation, damp and mould issues, and compliance with new regulations.

What are the key differences between this year’s report and last?

The 2025 SRP introduces significant changes and sharper regulatory expectations across multiple areas:

1. Governance and risk management

  • Governance is now a central theme in this year’s SRP. Boards are expected to use comprehensive data and stress testing to anticipate and mitigate risks.
  • The 2025 SRP explicitly encourages local authority providers to adopt governance practices from private providers. This is further backed up by the better (on average) performance around consumer (C) gradings published by the RSH for private providers when compared to local authority providers.
  • A stronger emphasis on Boards setting culture and demonstrating governance from the top, which was less pronounced in 2024.

2. Providing safe and decent homes

  • Awaab’s Law implementation begins in phases, extending to include further hazards through 2026–2027.
  • New electrical safety regulations take effect: November 2025 for new tenancies, May 2026 for existing ones.
  • Stronger focus on physical assessments and strategic data use for repairs - building on the 2024 focus on compliance and hazard identification.

3. Supply of new homes

  • £39bn in grants and £2.5bn in loans has been confirmed, highlighting the government’s increased commitment to policy ambitions.
  • Development forecasts are down by 6%, signaling caution amid market volatility - whereas 2024 had higher projections and optimism.
  • Risks from joint ventures and market fluctuations are highlighted more explicitly.

4. Business management

  • An expanded focus on data integrity, linking poor data to failed mergers and service delivery issues.
  • New technological risks: AI and data protection compliance.
  • The introduction of the rent convergence mechanism, with consultation outcomes pending.

5. Supported housing

  • Continued scrutiny of lease-based models, plus findings from a 2025 focus report.
  • Increased detail around commissioning risks and cost pressures, especially for small landlords and local authorities.

6. Energy efficiency and climate risk

  • Increased guidance on Net Zero, including scenario planning and asset performance data
  • Boards are expected to understand direct and indirect costs of climate change in 2025.

7. Insurance

  • Emerging interest from new insurers which may temper costs.
  • Boards urged to understand policy wording and covenant implications more thoroughly.

8. Fraud

  • Introduction of the Failure to Prevent Fraud Offence, stressing board-level responsibility for transparency and learning from incidents.
  • Legal and cultural emphasis of fraud risks.

9. Financial viability

  • EBITDA MRI interest cover fell to 91% in 2024/25, with recovery not expected until 2027/28 – highlighting worsening financial metrics compared to 2024’s report.
  • Debt now at £105.9bn, up from £100bn in 2024.
  • Boards advised to prioritise liquidity management and early engagement with funders.

10. Diversification

  • Non-social housing income declines to 20%, down from 23% in 2024.
  • Boards are cautioned to ensure diversification aligns with core purpose and does not risk social housing assets.

11. Reputational risk

  • Introduction of STAIRs requirements for private providers for transparency purposes.
  • Boards must now integrate tenant feedback into strategic decisions and communicate trade-offs clearly.

Why is the SRP shorter this year?

The report is more streamlined and thematic, focusing on depth rather than breadth. Risks are integrated into strategic narratives rather than listed in isolation, reflecting:

  • Emphasis on strategic themes.
  • Simplification for clarity.
  • Alignment with regulatory focus.
  • Recognition of interconnected risks.
 

The Regulator’s message

Providers face very little margin for error. Board and Leadership Teams must:

  • Ensure proactive governance, strong oversight and good data quality are non-negotiable.
  • Prioritise governance and financial resilience.
  • Ensure safety and quality compliance – tenant safety and stock decency cannot be delayed.
  • Balance development / growth ambitions with sustainability and financial viability.
  • Ensure early, visible planning and oversight around new / incoming regulations.

What should Boards and Leadership Teams think about?

Boards and leadership teams should:

  • Review governance frameworks to ensure culture and accountability start at the top.
  • Invest in data quality to support compliance, decision-making and operational resilience. It is key to have a robust second-line data quality framework, as well as coordinated third-line data integrity testing.
  • Plan for regulatory changes, including (but not limited to) Awaab’s Law Phases 2 and 3, and electrical safety requirements.
  • Stress-test financial plans against rising costs and market volatility but also focus on robust recovery planning arrangements, ensuring the Board are aware of the potential adverse effects of mitigation actions in stress scenarios.
  • Engage with tenants and communicate trade-offs transparently.
  • Prepare for climate and fraud risks and embed these into strategic planning.
  • Use the RSH’s regulatory judgements for proactive learning, often governance and viability downgrades and C3 / C4 grades can be used as early warning indicators and an opportunity to self-assess against other RPs’ failings.
 

 

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