In a review of the risks impacting the sector, the Social Housing Regulator highlights that there are more than a million people on the waiting list for homes, but providers are facing “significant economic challenges”.

A weaker housing market means that providers are finding it harder to replenish their surplus funds from the sale of homes.

At the same time, providers are having to spend large sums to improve fire safety following the Grenfell tragedy and tackle damp and mould following the death of Awaab Ishak.

The report says: “As a result, many landlords are operating in a low-headroom environment that leaves them very little margin for error.

“Despite these challenges, expectations on landlords continue to be high. “With over 1.3 million people on social housing waiting lists, the need for new social housing is abundantly clear. 

“The government confirmed additional grant funding for landlords in the 2025 Spending Review, and they are expected to make an important contribution to the government’s target for new homes.”

The report comes after housebuilders recently warned that up to 8,500 affordable homes that are scheduled to be built over the next year are at risk of being left empty, largely because of the difficulties facing social housing providers. 

The Home Builders Federation says that more than 700 developments have stalled as social housing providers have reduced their take-up of the properties built under Section 106 contracts.

Under these rules, local authorities dictate how many properties meeting the government’s Affordable Homes definition – meaning they will be offered at below market value – developers must build on each site.

The HBF warned that the economic pressures on social housing providers is hindering them from buying up the homes which is having a knock-on impact on developers’ ability to finance and proceed with new projects.