Value for Money metrics and reporting 2025: Summary report
Annex to Global Accounts of private registered providers
Applies to England
Documents
Details
This publication provides a summary overview of value for money performance and achievements delivered by the social housing sector in England for the year ending 2025.
The Value for Money (VFM) Standard requires private registered providers to report annually against prescribed VFM measures with the aim of enhancing both transparency and accountability to the sector and addressing relative performance. With increasing demands on providers to reinvest into their existing homes and to deliver new energy-efficient housing, it is essential that boards provide robust challenge where they are not making the most effective use of their resources to achieve the strategic objectives of the organisation.
Value for money performance in recent years has been defined by changes to the sector’s operating environment and financial challenges arising from higher interest rates and the need to increase investment in the existing housing stock. The impact of these trends continued to play out in 2025. Investment in the existing stock to address building safety issues, improve energy efficiency and improve stock quality continued to affect financial performance for many providers. Headline Social Housing Costs (Headline costs) per unit have risen again and average operating margins and EBITDA-MRI interest cover have continued to decline. For many providers this has meant making trade-offs in their investment decisions and this year’s data shows a consequent fall in new supply, particularly for non-social housing development.
However, there are still significant opportunities for providers to drive growth and support economic development. With greater financial certainty following recent government announcements, including the long-term rent settlement of CPI+1% from April 2026 for ten years and a new Social and Affordable Homes Programme (SAHP) there is now renewed pressure on the sector to ensure it maximises its resources and to help meet housing demands across all regions of the country.
Beneath the overall sector trends, this publication shows that there is significant variation between providers and that the financial pressures facing the sector are not distributed evenly. There are particular challenges facing some large providers.
However, the financial pressure on parts of the sector is not universal. The weighted sector average EBITDA-MRI interest cover figure has fallen to 87% but this is heavily influenced by a small number of very large providers which have low interest cover and are big enough to materially affect the average figure for the sector as a whole. Most providers have stronger interest cover than this weighted sector average figure, and the median provider has EBITDA-MRI interest cover of 113%. The top quartile of providers have interest cover of 152%. There is a similar degree of variability in terms of delivery of new supply with new social housing supply as a percentage of the existing stock more than three times higher in the upper quartile of providers (2.1%) than in the lowest quartile (0.6%). This reinforces the important role of boards in shaping the future of their organisations, informed by an evidence-based strategy that addresses the need to preserve financial viability and undertake necessary investment in the existing stock whilst also assessing the opportunities to foster growth and deliver new social housing. It is also important that boards make the most effective use of their assets and seek to optimise the efficiency of their businesses to strengthen their capacity to deliver improved outcomes for both existing and future tenants.
Other key highlights on VFM performance include:
Record levels of capital reinvestment especially into existing homes
Alongside a challenging environment, the sector invested record levels of capital into existing and new homes of £14.8bn as more providers focus on sustainable homes, stock quality and building safety. Capital reinvestment into existing homes increased by 15% to £3.8bn in the year. However, while the sector continues to direct substantial investment into new homes, there was a more cautious approach in the year due to economic and policy uncertainty – overall reinvestment into new homes fell by 4% to £11bn. At an aggregate level, the sector delivered 53,330 new homes of which 48,548 were social housing.
Headline costs increased at a slower rate, but cost management remains challenging for some parts of the sector.
The sector’s headline cost per unit continued to outpace the general rate of inflation, albeit rising at a lower rate compared to previous years. The reported median headline cost increased by 11% to £5,690 per unit which was largely driven by maintenance and major repair and management costs. While there is evidence that providers with the largest proportion of tall buildings saw costs rise more slowly than in past years, these providers still experience much higher maintenance and major repair costs than other providers. For some parts of the sector the cost of building safety and other stock condition investment remains challenging.
Strategic repositioning of capital and assets
Persistent cost pressures continue to dampen the overall operating margin (which includes social housing activities) as some providers struggle to offset rising costs through net rental income alone. Despite stabilisation across some parts of the sector, the median operating margin overall was 17.4% which remains below the long-term average of 18.5%.
Notwithstanding these tighter margins, the sector’s utilisation of its asset base, measured by the return on capital employed, increased to 3.0% - its highest level in over three years as providers continue with their strategic asset management programmes.
Particular pressures in some regions
The financial pressures facing providers have been felt more acutely in some parts of the country than others. Many London providers, in particular, have been exposed to higher building safety costs, which has had an impact on their wider business plans. Providers who own the majority of their stock in London are much more likely to own flats rather than houses (the median London provider has 20% of stock defined as houses or bungalows, compared to a national average of 59%). Higher rise blocks are associated with higher maintenance and repairs costs, including for building safety work, and this helps contribute to London having the highest costs per property of any region. As a result, providers’ capacity to fund new supply has been most acutely affected in London, and the region continues to show the lowest level of social housing supply as a proportion of existing housing stock. This year, almost half of the providers with the majority of their stock in London delivered no new social housing supply.
Prioritisation and driving efficiency to deliver more and better social homes.
While these are challenging times for some providers, there is also greater certainty for providers to actively plan for the longer term. Importantly, there is now a shifting expectation on boards to transition from traditional oversight to more active, strategic leadership. As social housing providers, it is boards’ core responsibility to ensure their organisations are maximising their resources and intervening when there is strategic misalignment with their purpose.
To support that challenge, this publication is designed to complement recently published material pertaining to VFM performance – Delivering better Value for Money Summary Regression Note which enables stakeholder understanding of key factors that impact on provider level performance. The analysis set out as a part of that report is a good starting point for providers to challenge their organisation’s performance and we expect management to make good use of it to better support board decision-making from here on in.
It is up to providers to be transparent about their VFM performance and to evidence they are meeting the outcomes of the VFM Standard. This includes reporting against their strategies and showing how they are optimising resources in the delivery of their objectives. Providers should be up front when they are not meeting expected or planned outcomes. We will continue to seek assurance that providers are delivering the outcomes as required by the VFM Standard through our programme of Inspections. Where providers do not provide the evidence that gives us the assurance we need, we will reflect it in our regulatory judgements.
The full version of the Value for Money metrics and reporting 2025 publication which includes VFM sector analysis and feedback on sector VFM reporting pertaining to 2.2 of the VFM Standard is available on our VFM Metrics and Reporting 2025 page. You can also explore and filter VFM data from our VFM Benchmarking Tool.