The 5% challenge: How housing associations can protect margin in 2026

The sector under strain

Across the UK housing sector, financial pressure has become the new constant.

Pre-tax surpluses are down 39% year-on-year, EBITDA MRI interest cover has fallen to its lowest point since 2009, and repair and maintenance costs have soared to a five-year high of £8.8 billion.

With inflation, regulatory obligations, and asset investment colliding, holding a 5% margin has become the defining test of leadership resilience.

The question for every housing association board is no longer how to cut — it’s how to see.

From cost control to clarity control

Traditional cost-cutting no longer works in a sector pulled between compliance, community, and capital constraints.

The most resilient providers aren’t those spending less — they’re those seeing more.

The Drova Financial Resilience Playbook shows that stability starts when objectives are treated as fiscal anchors, tied directly to measurable risks, ownership, and accountability.

When every financial decision is connected to its purpose and impact, margin protection stops being reactive — and starts becoming strategic.

From management to mastery

Financial resilience in housing is not a finance function — it’s a leadership discipline.

Drova’s framework helps associations move from reactive budgeting to proactive performance control by connecting spend, compliance, and operational risk into one transparent system.

Boards that adopt this approach gain three immediate advantages:

1. Alignment: Objectives are owned and tracked by executives, creating focus and accountability.
2. Assurance: Risk and compliance actions link directly to measurable financial controls.
3. Visibility: Real-time dashboards replace fragmented reporting, giving Boards instant oversight of progress and pressure points.

This is where financial resilience becomes a system — not a scramble.

Three mindset shifts for 2026

1. Visibility over volatility

Inflation, supply chain shocks, and safety investment all create noise. Connecting spend and risk turns that noise into insight — and gives leadership the power to act early.

2. Ownership over oversight

Accountability drives calm. When every executive knows their lever — whether compliance, cost, or liquidity — financial control becomes consistent.

3. Precision over pressure

A 5% margin can’t be held through cost cuts alone. Precision comes from connecting objectives, metrics, and risks into one rhythm of performance.

Visibility is the new value driver

The Playbook identifies the metrics that matter most: operating surplus, liquidity ratio, and cost of maintenance per home.

Tracking these through a unified system like Drova GRC gives housing leaders the ability to pinpoint where financial headroom is eroding — and where interventions will protect it.

Visibility is no longer a reporting feature. It’s the foundation of resilience.

From pressure to protection

Financial pressure isn’t temporary — it’s structural.

But with the right systems and ownership, that pressure can create precision.

The Drova Financial Resilience Playbook gives housing leaders a clear roadmap to achieve this:

• Define objectives with explicit ownership and risk alignment.
• Link spend and compliance to financial performance and control.
• Track progress in real time through integrated dashboards.
• Embed risk and compliance into operations to prevent issues before they escalate.
• Report strategically, aligning the Board to the work that drives true recovery.

The result: housing associations don’t just hold the 5%.

They run it.

Hold the line through visibility

2026 will test every assumption about cost, control, and confidence.

The housing associations that thrive won’t be those who cut deeper — they’ll be those who see clearer.

Because running good business isn’t about austerity.

It’s about accountability, clarity, and connection.

Run good business. Run with visibility.