Housing associations in London are spending nearly 50% more than the national average on maintaining existing homes, partly due to post-Grenfell remediation work, according to the Regulator of Social Housing (RSH).

Rising Costs and Regional Disparities

The average capital reinvestment per home in London rose by 13% to £1,680 in the year ending March 2024. This contrasts sharply with other regions:

• North West: £1,010 per home
• England-wide average: £1,160 per home

London’s higher concentration of high-rise buildings has contributed to these elevated costs, with eight out of twelve landlords with at least 10% of their stock in buildings over seven storeys being based in the capital. The RSH noted that many of these buildings have undergone significant remediation work in recent years.

Impact on Development and Investment

The increased spending on existing stock has led many London housing associations to cut back on new developments, with the average investment per home falling by 8% to £4,650. However, London still ranks among the highest-spending regions for new housing, behind only the South East and East of England.

Despite these financial pressures, 49,287 new social homes were delivered by housing associations across England—the highest number since 2021.

Calls for Government Support

Fiona Fletcher-Smith, chair of the G15 group of London’s largest housing associations and CEO of L&Q, highlighted the unique cost pressures of maintaining affordable and social housing in the capital. She urged the government to:

• Commit to a 10-year rent settlement and rent convergence
• Provide equal access to the Building Safety Fund
• Announce a successor to the Affordable Homes Programme
• Increase funding for warm and decent homes

Sector-Wide Financial Trends

The regulator’s report revealed:

• A record £5,136 per home in headline operating costs—up 12% year-on-year
• Total investment in housing (existing and new) rose to £14.6 billion, up from £12.5 billion—the highest since 2018
• Housing associations spent a record £8.8 billion on repairs and maintenance

Despite these challenges, cost increases are expected to slow over the next five years, according to RSH forecasts.

Efficiency and Future Outlook

Will Perry, Director of Strategy at the RSH, acknowledged the sector’s resilience in managing competing demands but stressed the need for efficiency improvements to ensure continued investment in housing and services.

“The sector is proving resilient at grappling with competing demands, investing record amounts on new and existing homes,” he said. “However, it is crucial that landlords challenge themselves on their efficiency to continue building more homes and delivering better services for those who need them.”

The RSH Value for Money report, an annex to its global accounts, included data from 193 of the largest housing associations in England, excluding for-profit providers and councils.