Housing sector risk profile 2025: What’s changed and why it matters

The Housing Regulator’s latest Sector Risk Profile provides a detailed view of the sector’s evolving priorities. While the 2024 report focused heavily on financial strain and operational trade-offs, the 2025 edition broadens its scope. Governance now takes centre stage, underpinning everything from compliance to financial resilience. The message is clear: boards need strong, data-driven decision-making to navigate an increasingly complex environment.

Governance and data: The foundation of risk management

In last year’s profile, governance was important but largely framed around managing financial pressures. This year, it’s the central theme. Boards are expected to base decisions on robust, accessible data – whether for stress testing, health and safety risk management, or long-term planning. Reliable data is now a core requirement for effective strategy and regulatory compliance.

Tenant safety: Higher standards, greater accountability

Safety remains a top priority, but the requirements have stepped up. Mandatory compliance with Awaab’s Law is now in effect, alongside new electrical safety regulations and preparations for the Decent Homes Standard review. Boards must ensure thorough stock assessments and maintain transparent communication with tenants during remediation. The emphasis is on proactive compliance and openness.

Financial pressures: Managing the squeeze

Debt across the sector has surpassed £100 billion, and refinancing at higher rates continues to tighten margins. Interest cover remains weak at around 91%, prompting the regulator to call for stronger treasury management and early engagement with lenders. Stress testing for covenant breaches and liquidity risks is now a critical part of maintaining financial health.

Development: Balancing growth and quality

Government support – £39 billion in grants and £2.5 billion in loans – offers opportunities for new supply. Yet forecasts for new homes remain down, with a 6% drop compared to last year. Boards face a delicate balance: investing in development while improving existing stock. Strategic planning will be key to achieving both objectives without overstretching resources.

Emerging risks: Expanding the risk landscape

The 2025 profile introduces new areas of focus. Climate resilience and Net Zero planning are now linked directly to financial strategy, requiring boards to integrate adaptation measures into long-term plans. Insurance premiums remain high, though increased competition may offer some relief. Fraud prevention is also in the spotlight, with new legislation introducing the Failure to Prevent Fraud offence. Finally, transparency expectations have risen with Social Tenant Access to Information Requirements (STAIRs), reinforcing the need for openness and engagement.

A clearer regulatory tone

Perhaps the most notable shift is in tone. The 2024 profile centred on financial strain and operational trade-offs. This year, the emphasis is on governance, data integrity and proactive compliance. Boards are expected to demonstrate value for money and robust risk management in an environment of heightened scrutiny. The challenge is significant, but so is the opportunity to build trust and resilience.

Technology as an enabler

Meeting these rising expectations requires practical tools that make governance and risk management easier. Risk Assist from OneAdvanced is an AI agent designed to help boards identify, assess and manage risks with confidence. It uses advanced algorithms to analyse context, generate accurate risk statements, recommend controls aligned with your frameworks, and deliver actionable insights for faster decisions and seamless compliance. In an environment of heightened scrutiny, this AI-driven approach strengthens resilience and supports consistent, proactive risk management

The takeaway

The 2025 Sector Risk Profile signals a sector moving toward stronger governance and greater transparency. For boards, this means acting decisively, investing in data and leveraging AI-driven technology to manage risk effectively. Preparation will be central to maintaining resilience and confidence.

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