Regulatory & Compliance Requirements¶
What a Housing Association Business Planning Tool Must Produce
February 2026
Overview¶
UK housing associations operate in one of the most heavily regulated environments in the property sector. A business planning tool must produce outputs that satisfy multiple overlapping requirements from the Regulator of Social Housing (RSH), lenders, credit rating agencies, and increasingly, sustainability reporting frameworks.
This document provides a complete reference for what a modern business planning platform must deliver.
1. Financial Forecast Return (FFR)¶
The FFR is the primary regulatory submission required by the RSH. It is the single most important output any business planning tool must produce.
Format & Submission¶
| Attribute | Detail |
|---|---|
| Format | Standardised Excel-based template |
| Submission portal | NROSH+ (nroshplus.regulatorofsocialhousing.org.uk) — manual entry or bulk import template upload |
| Deadline | 30 June each year (earlier if board approves plan sooner) |
| Who must submit | All private registered providers owning/managing ≥1,000 social housing units. Smaller providers may be required if deemed high-risk |
| Reporting basis | Group consolidated |
| Data precision | £000s to one decimal place |
| Forecast period | 30 years (regulatory focus on first 5 years) |
| Accompanying documentation | Board-approved business plan + supporting papers |
Template Structure¶
Part 1 — Front Sheet¶
- Provider identification and year-end dates
- Full list of all registered and non-registered group entities/subsidiaries
- Confirmation of consolidated return
Part 2 — Financial Statements (Lines 1–132)¶
Statement of Comprehensive Income (SOCI) — Lines 1–59:
| Line Range | Content |
|---|---|
| Lines 1–2 | Rents receivable, service charges |
| Lines 3–15 | Other income: grants, first tranche shared ownership sales, non-social housing income |
| Lines 16–20 | Operating costs: management, service charges, routine maintenance, major repairs, planned maintenance |
| Lines 21–41 | Depreciation, impairment, disposals, other costs |
| Line 42 | Interest charges |
| Lines 43–59 | Other comprehensive income items |
Statement of Financial Position (SOFP) — Lines 60–101:
| Line Range | Content |
|---|---|
| Lines 60–70 | Housing properties (at cost or valuation), other tangible fixed assets |
| Lines 71–80 | Investments, joint ventures, properties for sale, stock/WIP |
| Lines 81–90 | Debtors, cash and cash equivalents |
| Lines 91–101 | Short-term and long-term debt, finance leases, deferred capital grants, pension provisions, reserves |
Statement of Cash Flow — Lines 102–132:
| Line Range | Content |
|---|---|
| Lines 102–115 | Operating activities cash flow |
| Line 116 | Disposals: sales to tenants (RTB/RTA), shared ownership staircasing, void property open market sales |
| Line 116a | Bulk sales to other providers (new 2025) |
| Lines 117–132 | Investing and financing activities |
Part 3 — Assumptions & Tenure Inputs (Lines 1–160)¶
| Line Range | Content |
|---|---|
| Lines 1–15 | Assumptions: CPI, RPI, base rate, % fixed-rate debt |
| Lines 16–22 | Stock totals: overall housing unit numbers by year; bulk sales disclosure |
| Lines 23–115 | Social tenures: general needs, supported, older people, LCHO, affordable rent, intermediate rent — with opening/closing units, average rents, new development |
| Lines 116–143 | Other tenures: market rent, student, key worker, non-social |
| Lines 144–160 | Building safety costs (revenue and capital), capital grant assumptions |
Part 4 — Compliance Questions (Lines 1–24c)¶
- Financial covenant calculations and compliance confirmations
- Security questions and stock quality standard compliance
- Governance and Financial Viability Standard certifications
Recent Changes (2025/26 FFR)¶
- New lines for building and fire safety costs (Lines 144a, 145a — separate identification of life-critical fire safety defects on buildings ≥11m)
- Enhanced disposal tracking (Lines 116/116a)
- Simplified average rent calculations within tenure sections
- Enhanced capital grant assumption disclosures
- New bulk sales disclosure (Line 22)
- Focus on EBITDA MRI metric
2. RSH Economic Standards¶
Three economic standards apply to private registered providers:
2.1 Governance and Financial Viability Standard¶
Providers must:
- Maintain effective governance delivering objectives transparently
- Comply with all legislation and regulatory requirements
- Safeguard taxpayers' interests and sector reputation
- Maintain robust risk management and internal controls
- Ensure effective resource management for ongoing viability
- Protect social housing assets
What a tool must demonstrate: The business plan maintains financial viability under all reasonable scenarios, with clear mitigation triggers and recovery plans.
2.2 Value for Money (VfM) Standard — 7 Key Metrics¶
These must be calculated, reported in annual accounts, and benchmarked against sector peers:
| # | Metric | Formula |
|---|---|---|
| 1 | Reinvestment % | Investment in existing & new properties ÷ Total housing properties at cost/valuation |
| 2 | New supply delivered % | New social housing units delivered ÷ Total units owned/managed |
| 3 | Gearing % | Net debt ÷ Total housing properties at cost/valuation |
| 4 | EBITDA MRI Interest Cover | EBITDA (adjusted for major repairs) ÷ Interest payable — the primary RSH viability metric |
| 5 | Headline social housing cost per unit | Total social housing costs ÷ Total units owned/managed |
| 6 | Operating margin % (social housing) | Operating surplus on SHL ÷ Turnover from SHL |
| 7 | Operating margin % (overall) | Overall operating surplus ÷ Overall turnover |
2024/25 sector context:
- EBITDA MRI interest cover fell to 91% (lowest since 2009), recovery not expected until 2027/28
- Average headline cost per unit: ~£3,730–£3,980
- Maintenance accounts for ~50% of headline spend
- Operating margins at historically low levels (17.3%)
2.3 Rent Standard¶
| Parameter | Rule |
|---|---|
| Annual increase cap | CPI + 1% (based on September CPI of prior year) |
| Formula rent tolerance | Up to 5% (general needs) / 10% (supported housing) above formula rent |
| Affordable rent | ≤80% of market rent at initial let, then CPI + 1% annually |
| 10-year settlement (from April 2026) | CPI + 1% confirmed for 10 years |
| Rent convergence | £1/week uplift from 2027, £2/week from 2028 for below-formula rents |
| Income threshold | Excludes households with prior-year income >£60,000 |
What a tool must model: Rent forecasts per unit/tenure type, applying CPI + 1% with convergence uplifts, respecting formula rent caps and tolerances, over a 30-year horizon.
3. Social Housing SORP & FRS 102¶
Applicable Standards¶
- FRS 102 (UK GAAP) as the base standard
- Housing SORP — sector-specific overlay
- Housing SORP 2026 (revised, aligned with revised FRS 102, published September 2024) — effective for accounting periods beginning 1 January 2026; first March year-end affected: 31 March 2027
- RSH Accounting Direction for registered providers
Key Sector-Specific Accounting Treatments¶
Property Classification¶
| Category | Treatment | Examples |
|---|---|---|
| PPE | Depreciated cost or revaluation | Social rent, affordable rent, shared ownership rental portion |
| Investment property | Fair value through P&L | Market rent, commercial properties |
| Inventories | Lower of cost/NRV | Shared ownership equity portion, properties developed for sale |
Classification is by intended use of the property, not the organisation's mission. Mixed-tenure developments must be separated.
Social Housing Grant (SHG)¶
- Classified as non-exchange transaction (not customer revenue)
- Recognised using performance model or accrual model
- Recycled via Recycled Capital Grant Fund (RCGF) on disposal
Component Accounting¶
- Housing properties must be componentised with separate useful lives:
- Structure, roof, kitchens, bathrooms, windows, heating systems, electrical
- Each component depreciated separately
- Replacement treated as disposal of old component + addition of new
SORP 2026 Key Changes¶
- Revised income recognition: five-step model for service charges as customer contracts
- New lease accounting: right-of-use asset capitalisation (exceptions for short-term/low-value)
- Regeneration scheme accounting clarifications
- Capitalisation of building safety and decarbonisation costs
- Non-compliance provisions for Decent Homes Standards
- Strategic reports mandatory for providers with 1,000+ homes (reduced from 5,000)
Required Financial Statements¶
- Statement of Financial Position
- Single Statement of Comprehensive Income (not separate income + OCI)
- Statement of Changes in Equity
- Statement of Cash Flows (mandatory for all)
- Notes with material accounting policies
Segmental Reporting (RSH Accounting Direction)¶
- Social housing lettings (by tenure type)
- Other social activities
- Non-social housing activities
- Operating surplus/deficit by segment
- Void losses
4. Lender Requirements & Covenants¶
Typical Loan Covenants¶
| Covenant | Typical Threshold | Description |
|---|---|---|
| Interest Cover Ratio (ICR) | ≥110%–130% | Operating surplus ÷ Interest payable (definitions vary by lender) |
| EBITDA MRI Interest Cover | ≥100%–120% | EBITDA adjusted for major repairs ÷ Interest |
| Gearing | ≤50%–70% | Net debt ÷ Total assets (or housing properties) |
| Asset Cover | ≥105%–150% | Value of charged assets ÷ Outstanding debt |
| Debt per unit | ≤£25,000–£40,000 | Total debt ÷ Number of units |
Critical Implementation Note
Covenant definitions vary significantly between lenders. A business planning tool must support configurable covenant calculations with multiple definitions per covenant type. A single hard-coded formula will not suffice.
Lender Reporting Requirements¶
- Quarterly or semi-annual management accounts
- Annual audited financial statements
- Annual business plan / 30-year financial forecast
- Covenant compliance certificates (typically quarterly)
- Development programme updates
- Treasury management reports
- Board-approved budgets
- Notification of material events (covenant breaches, regulatory downgrades, significant disposals)
What a Tool Must Produce for Lenders¶
- Configurable covenant calculations (multiple definitions per covenant)
- Headroom analysis — distance from breach under base case and stress scenarios
- Golden rules / compliance certificates
- Sensitivity analysis on covenants
- Debt maturity profiles
- Security pool analysis (charged vs uncharged assets)
- Refinancing risk analysis
Current Environment¶
- Total sector debt: ~£105 billion and rising
- EBITDA MRI at sector-low of 91% — lenders scrutinising viability closely
- Refinancing legacy debt at significantly higher rates
- Building safety and decarbonisation costs impacting future cash flows
5. Building Safety Act & Awaab's Law¶
Awaab's Law (Social Housing Regulation Act 2023)¶
| Phase | In Force | Scope | Key Timescales |
|---|---|---|---|
| Phase 1 | 27 October 2025 | Damp, mould, emergency hazards | Investigate: 10 working days; Make safe: 5 working days; Complete repairs: 12 weeks |
| Phase 2 | Late 2026 (expected) | Excess cold/heat, falls, structural, fire, electrical, hygiene | Similar timescales expected |
Financial Impact (Phase 1 alone):
| Cost Category | Estimated Value |
|---|---|
| Total cost (present value, 2025 prices) | £180.6 million sector-wide |
| Average annual cost | £16.5 million sector-wide |
| Additional staffing for faster repairs | £129.0 million |
| Familiarisation costs | £6.0 million |
| Written investigation summaries | £11.3 million |
Penalties: Unlimited fines from RSH + tenant legal claims for breach of statutory duty.
Building Safety Act 2022¶
- Applies to higher-risk buildings (18m+ or 7+ storeys with residential use)
- Requirements: duty holders, "golden thread" of safety-critical digital records, Safety Case Reports
- Building Safety Levy from October 2026
- Phase 2 (October 2026): extension to all 29 HHSRS hazards
What a Tool Must Model¶
- Separate cost lines for:
- Building safety remediation (cladding, fire safety)
- Life-critical fire safety defects (buildings ≥11m) — as per FFR lines 144a/145a
- Awaab's Law compliance (staffing, repairs acceleration)
- Revenue vs capital split for each category
- Impact on 30-year cash flows and covenant headroom
- Stock condition survey integration
- Prioritisation modelling by building risk category
6. ESG & Sustainability Reporting¶
Sustainability Reporting Standard for Social Housing (SRS)¶
| Attribute | Detail |
|---|---|
| Launched | November 2020 |
| Current version | v2.0 (v2.1 expected Spring 2026) |
| Status | Voluntary but increasingly expected by lenders/investors; likely to become mandatory |
| Coverage | 48 ESG criteria across 12 themes |
| Adopters | 170+ housing providers |
Core Themes: Climate Change, Ecology, Resource Management, Affordability & Security, Building Safety, Resident Voice, Diversity & Governance, Staff Wellbeing, Supply Chain.
EPC & Net Zero Requirements¶
| Target | Detail |
|---|---|
| EPC C by 2028 | Climate Change Committee target for all social homes |
| EPC C by 2030 | Government regulation for fuel-poor households |
| Net zero by 2050 | UK statutory target |
| Sector decarbonisation cost | £36 billion (NHF/Savills estimate) ≈ £3.5bn/year |
| Government funding | Warm Homes: Social Housing Fund — £754M in 2026/27 (64% increase) |
Cost Ranges per Property: - 84% of properties can reach EPC C for <5% of property value - Over half require <£5,000 - Hard-to-treat properties can exceed £50,000 - Integrated new-build + retrofit strategy: £27M over 30 years (typical HA) vs £50M retrofit-only
What a Tool Must Model¶
- EPC band of each property/archetype
- Upgrade cost per property/archetype
- Phased retrofit programme (years 1–30)
- Government grant funding assumptions
- Carbon emissions trajectory (Scope 1, 2, 3)
- SRS metrics output
- Net zero pathway scenarios
- Impact on covenant headroom
7. Stress Testing Requirements¶
The RSH expects boards to test business plans against "genuine worst-case scenarios" with clear, pre-defined mitigation triggers.
Required Stress Test Scenarios¶
| Category | Scenario | Typical Test Range |
|---|---|---|
| Interest rates | Sustained high rates | +1% to +3% above base case |
| Inflation | High/low divergence | CPI ±1–2% from assumption |
| Rent settlement | Below CPI + 1% / rent freeze | CPI + 0%, CPI - 1%, full freeze |
| Void rates | Increased voids | +1% to +5% above base |
| Arrears | Increased bad debts | +1% to +3% of rental income |
| Development costs | Cost overruns | +10% to +30% on programme |
| Sales market | Shared ownership / outright sales downturn | -10% to -30% on values; 50% volume reduction |
| Major repairs | Unexpected capital needs | +20% to +50% above plan |
| Building safety | Remediation costs | £10K–£50K+ per affected unit |
| Decarbonisation | Net zero cost escalation | +20% to +50% above plan |
| Combined / multi-variate | Multiple simultaneous shocks | Interest + rent + voids + arrears combined |
What Boards Must Demonstrate¶
- Impact — What happens to cash flow, covenants, and peak debt under each scenario
- Mitigation triggers — Pre-defined thresholds that trigger actions (e.g., pause development, sell assets, renegotiate terms)
- Mitigation effectiveness — Proof that mitigations restore viability
- Timing — When would breach occur vs when mitigation must be activated
- Residual risk — What cannot be mitigated
What a Tool Must Produce¶
- Automated scenario modelling (toggle assumptions)
- Multi-variate stress testing (combine scenarios)
- Covenant headroom under each scenario
- Cash flow waterfall showing impact
- Break-even analysis (at what point does breach occur?)
- Mitigation modelling (what-if recovery actions)
- Board-ready stress test summary reports
8. Complete Checklist: Required Outputs¶
Regulatory Outputs¶
- [ ] FFR Excel template — auto-populated, ready for NROSH+ upload (30-year forecast, 132 financial lines + 160 assumption lines)
- [ ] VfM metrics — all 7 RSH metrics calculated annually for 5+ years
- [ ] Rent calculations — CPI + 1% with convergence, by tenure type, 30 years
- [ ] Covenant compliance reports — configurable for multiple lenders with different definitions
- [ ] Stress test outputs — scenario analysis with mitigation modelling and board-ready summaries
Financial Statements (SORP-Compliant)¶
- [ ] Statement of Comprehensive Income — segmented by social housing lettings / other social / non-social
- [ ] Statement of Financial Position — with correct property classification (PPE / investment / inventory)
- [ ] Statement of Cash Flows — 30-year projection with operating, investing, financing activities
- [ ] Segmental analysis — operating surplus/deficit by segment, void losses
- [ ] Component accounting — separate depreciation by component type
Operational Outputs¶
- [ ] Unit forecasts by tenure — opening/closing, development pipeline, disposals, 30 years
- [ ] Rent roll projections — by tenure, with average rents and convergence
- [ ] Development programme — phased, with funding mix (grant, debt, cross-subsidy)
- [ ] Stock investment programme — component replacement, building safety, decarbonisation
Treasury & Debt¶
- [ ] Debt maturity profile — existing + new facilities
- [ ] Interest cost forecast — fixed/variable split
- [ ] Peak debt analysis — when maximum borrowing occurs
- [ ] Security pool — charged vs uncharged assets
- [ ] Refinancing risk analysis — maturities, rate exposure
- [ ] Configurable covenant calculations — multiple lender definitions
Building Safety & Sustainability¶
- [ ] Building safety cost forecasts — revenue + capital, by building category
- [ ] Decarbonisation programme — EPC upgrade costs, phasing, grant assumptions
- [ ] SRS/ESG metrics — for sustainability reporting
- [ ] Carbon pathway — emissions trajectory to net zero
Board & Governance¶
- [ ] Board summary dashboard — key KPIs with traffic-light indicators
- [ ] Stress test summary — scenarios, impacts, mitigations in board-readable format
- [ ] Peer benchmarking — VfM metrics vs sector medians
- [ ] Going concern assessment — 12-month + longer-term viability statement support
- [ ] Audit trail — full history of who changed what, when
Key Compliance Dates (2025–2027)¶
| Requirement | Frequency | Deadline / Key Date |
|---|---|---|
| FFR submission | Annual | 30 June |
| SDR submission | Annual | 31 May |
| Tenant Satisfaction Measures (TSM) | Annual | 30 June |
| Quarterly Survey | Quarterly | 3 weeks after quarter end |
| Electronic Annual Accounts | Annual | 6 months after FY end |
| Fire Safety Remediation Survey | Quarterly | Various |
| Awaab's Law Phase 1 | In force | 27 October 2025 |
| Awaab's Law Phase 2 | Expected | Late 2026 |
| Housing SORP 2026 effective | Ongoing | 1 January 2026 (first March YE: 31 March 2027) |
| Building Safety Act Phase 2 | Expected | October 2026 |
| Competence Standard (senior managers) | Ongoing | October 2026 |
| EU Data Act (switching/egress charges eliminated) | In force | January 2027 |
Key Regulatory Bodies¶
| Body | Role | URL |
|---|---|---|
| RSH | Regulator of Social Housing | gov.uk/government/organisations/regulator-of-social-housing |
| NROSH+ | Data collection portal | nroshplus.regulatorofsocialhousing.org.uk |
| NHF | National Housing Federation (trade body) | housing.org.uk |
| CIH | Chartered Institute of Housing | cih.org |
| Homes England | Government housing agency / grant funder | gov.uk/government/organisations/homes-england |
| SHR | Scottish Housing Regulator | housingregulator.gov.scot |
This document is part of a four-part research package. See also: Executive Summary · Product & Competitive Intelligence · Build Estimate