The Regulator of Social Housing (RSH)’s first quarterly survey of 2020/21 found that providers with more than 1,000 homes invested £3.1bn in new build during the three months to 30 June.
That represents an 11% increase on the previous quarter and is 68% higher than the same period in 2020 – when the first coronavirus-induced lockdown was imposed – but is still well below the £4.4bn forecast.
A report on the survey findings by the RSH said: “Many providers are still reporting ongoing delays from the pandemic, shortages of materials and labour in the construction sector, as well as escalating prices affecting lead times.
“Several providers have also stated issues relating to Section 106 property negotiations and the phasing of grant receipts. This has resulted in the re-profiling of development schemes.”
Almost a quarter of the spending shortfall was from seven housing associations mainly based in London and the South East, it added.
The 209 housing associations which responded to the survey expect to spend £17.5bn on development in the year to 30 June 2022. That compares favourably to the £11.6bn spent in the previous year, and in further good news for the sector is higher than pre-pandemic levels.
The RSH said the latest data indicates that the sector is in a “good position to recover from the impact of the pandemic” with “strong” aggregate liquidity.
Organisations surveyed had total cash and undrawn facilities of £34.5bn at the end of June, enough to cover their £23.2bn spending on interest, loan repayments and development over the next year.
All are “taking appropriate action to secure sufficient funding well in advance of need”, the RSH said.
New finance worth £2.4bn was agreed during the quarter, with 78% from capital markets.
The survey also recorded the highest ever first-quarter spend on capitalised major repairs at £459m – but, once again, that figure was below forecasts.
Will Perry, director of strategy at the RSH, said: “The social housing sector is in a good position to recover from the impact of the coronavirus pandemic. Providers will need to remain alert and ready to respond to further changes in the operating and economic environment.”