Housing association costs rising faster than inflation

New research by the Centre for Economics and Business Research (CEBR) has analysed inflation trends for the major costs housing associations face.

It finds that in significant areas – including construction costs and repairs and maintenance materials – costs are increasing more than headline inflation rates.

Key findings:

• Inflation on construction costs overall accelerated to 9.6% in June 2022.
• The cost of new housing has risen even more quickly, with inflation at 12.3% in June 2022.
• Repair and maintenance prices surged over 2021 and 2022, with annual price increases for repair and maintenance materials peaking in April 2022, at 16.8%. Annual price growth was still highly elevated in July 2022 at 14.0%.

NHF Chief Executive Kate Henderson said:

“This report demonstrates the huge financial pressures housing associations are currently facing with the cost of repairs materials and building new homes already rising well above inflation by 14% and 12.3% respectively.

“This is likely to worsen over the coming months, feeding through to all areas of spend and is on top of the pressures of building safety costs and the costs of retrofitting homes. We know there will be particular challenges for supported housing providers who operate on very tight margins.

“Housing associations must ensure they can continue to maintain their homes and provide vital services to residents in the years ahead. They are also concerned about the impact rising living costs are having on social housing residents.

“In this context they been thinking very carefully about their approach to future rents and actively looking at what additional support they put in place for residents.”