Sector Risk Profile 2025

The Regulator of Social Housing (RSH) published its Sector Risk Profile report (the Profile) for 2025 yesterday. The Profile sets out the most significant sources of risk to landlords and their ability to deliver the outcomes of the financial and consumer standards. Registered Providers (RPs) are warned that they must continually work to improve their governance and risk management if they are to stay resilient in a challenging landscape.

Fiona MacGregor, Chief Executive of the RSH, has said that: 

“Ignoring the value of good governance weakens social landlords’ resilience against risk. This is more important than ever, at a time when risks are intensifying, and pressure is growing to deliver more and better social homes. Only by focusing on governance, informed by robust data and risk management processes, can landlords make the right strategic decisions and improve social housing in the long-term.”

The Regulator identifies the following key themes where they see the most risk and provides guidance on mitigating that risk. They are:

• Providing safe and decent homes: Tragedies such as the Grenfell Tower fire and the death of Awaab Ishak have shown the consequences of health and safety failures. Whilst landlords are spending record amounts of money on improving the quality of tenants’ homes, including work to address damp and mould, fire safety and other potential hazards, common failures expose tenants to risks and can damage trust in the entire social housing sector. It is therefore crucial that landlords strive to meet the required standards.

• Supply of new homes: Expectations continue to be high as RPs have a crucial role to play in building new homes for the future. With over 1.3 million people on social housing waiting lists there is increasing pressure on temporary accommodation provision which Local Authorities simply cannot keep up with. The need for new social housing is obvious, and Regulator expects RPs to be making strategic plans to contribute to the supply of new homes. 

• Business management: RPs must be aware of risks that can impact on their business and have an understanding of the relevant standards, requirements and other statutory duties. This can be achieved with robust and complete data sets to manage and mitigate strategic risks.

• Ensuring financial viability: Delivering services to existing and future tenants requires RPs to remain financially viable. Financial pressures include the need to invest in the safety and quality of existing homes while also building new homes, increases in the cost of debt, and cost pressures for labour and materials is a serious problem. RPs will need to think innovatively when considering their future strategies and corporate plans to ensure they achieve value for money and enough head room to further their objectives.

• Managing reputational risks: Landlords’ activities continue to be scrutinised closely, notably by current and future tenants, as well as the media. Tenants’ views should be actively sought and integrated into strategic decision making in the spirit of the consumer standards. The Regulator expects a level of transparency on how their views have informed decisions on landlord services so RPs will need to keep reviewing their tenant engagement and involvement strategies.

The 2025 Profile in many ways continues the themes of the 2024 Profile so whilst many of the risks identified are unsurprising and are known, the sector is continuing to operate in an increasingly difficult and constrained environment. Landlords must ensure they are making the right strategic decisions with evidence based governance and oversight in order to meet the challenges of the risks discussed above.

For more information, the full Report can be found here: Gov.uk - Sector Risk Profile 2025

This is the first of two articles, with another one on governance issues to follow shortly. Be sure to keep an eye out for future updates on this topic.