The risks we’re not talking about, but should be planning for

The housing sector is good at managing known risks. The question is whether it’s ready for the ones it hasn’t imagined yet.

By Michael Appleby, Group CEO, Altair

Most housing association boards are, in my experience, thoughtful and diligent about risk. They scrutinise their registers, stress-test their business plans and take regulatory compliance seriously. Yet there is a category of risk that rarely gets the attention it deserves — not because leaders are complacent, but because the most consequential risks are, by definition, the ones that have not happened yet.

Risk registers are shaped by experience: what has gone wrong before, what the regulator is focused on now and what peers are discussing across the sector. They are essential. But they are also, by their nature, somewhat backward-looking.

The future does not announce itself in advance. The shocks that do most to knock organisations off course are often the ones they did not see coming.

Step back from today’s operational pressures and six powerful macro forces come into view that are likely to shape the next five to ten years. None of these are a secret, but they offered get less attention when planning for risk than other more immediate and obvious pressures. The forces are; geopolitical instability, sustained economic pressure, declining public trust in institutions, shifting demographics, the accelerating impact of AI and the growing physical effects of climate change.

Five uncomfortable ‘what if’ scenarios

One way to respond is to start with those macro forces and ask a series of “what if?” questions. That approach helps boards and executive teams think through scenarios that are plausible, challenging and potentially material to the sector’s future.

These are not predictions. They are, however, scenarios worth serious consideration.

Scenario 1 – What if the UK had to operate in a prolonged period of geopolitical conflict?

It is no longer unrealistic to ask what an extended period of geopolitical conflict could mean for the UK. Current conflicts in the Middle East and Eastern Europe may not translate into war on British soil, but they could still drive a significant reprioritisation of national spending, supply chains and resilience planning. Housing organisations should at least consider what that would mean in practice.

Even a marked increase in defence spending would have consequences elsewhere. Pressure on public finances could reduce the scope for housing investment and constrain wider public spending. In that environment, organisations might face weaker grant support, higher costs, more fragile supply chains and increasing pressure on tenants and communities.

With little or no additional government funding, how would housing associations continue to deliver new homes or invest in existing stock? The risks extend well beyond funding. Asset values and insurance costs could come under scrutiny (particularly if the UK was at risk of direct attacks), arrears and bad debts might rise (if we enter into a recession or significant economic disruption / inflation), and communities themselves could become more vulnerable to economic and social instability.

This is not a comfortable scenario to contemplate. But, as the pandemic showed, preparation is better than reaction. Business continuity, liquidity, data resilience and asset exposure are all areas where advance thinking would matter.

Scenario 2 – What if a tech-first competitor could do what you do — at half the cost?

In every sector is being reshaped by digital transformation. The most disruptive competitors in other sectors have rarely been traditional organisations that modernised incrementally. More often, they have been new entrants that used technology to rethink the model altogether.

In housing, that could mean an AI-enabled provider designed from the ground up: one that embeds automation across core functions, from predictive maintenance and smart homes to repairs triage, compliance management and resident services delivered through natural language interfaces rather than traditional call centres. It would be leaner, more scalable and potentially more cost-efficient than organisations carrying decades of legacy systems, processes and assumptions.

This kind of disruption is already visible in other sectors, so it is reasonable to ask why housing would be immune. The competitive dynamics would not be identical, but a model of this kind could still shift expectations, economics and service standards in ways that the rest of the sector would have to respond to.

Scenario 3 – What if you simply couldn’t find the people you need?

The labour market pressures facing the sector are already real — in repairs, housing management and care. Post-Brexit shortages have extended into trades and frontline roles. More structural trends are more challenging still: an ageing population, a shrinking working-age workforce and a generation entering employment with different expectations about what work should offer.

AI and technology will help, but they cannot fully replace human judgement, care and relationship-based work. Over time, organisations could find significant staffing gaps emerging in precisely the services that matter most to residents.

That would force a fundamental rethink of workforce strategy, employee value proposition and service design. But it also raises a more unsettling question: could a housing association operate with significantly fewer people, and if so, what would need to change?

Scenario 4 – What if the sector saw a systemic failure?

All mature sectors experience a systemic failure at some point — banking, retail, technology and major contracting firms all offer examples in recent history. Housing is better protected than many sectors because of its regulatory framework and governance discipline, but as we have seen from some in sector examples – that does not mean it is immune.

If a large, high-profile provider were to enter serious financial distress, the consequences would be wide-ranging: public trust could be damaged, investor confidence in the sector weakened and costs increased across the sector. In the short term, regulatory intervention, rescue arrangements and asset transfers might be required. In the longer term, the effects could include tighter regulation and a reset in relationships with lenders and other stakeholders.

The point is not that consolidation is inherently problematic, but that scale can amplify weaknesses as well as strengths, and impacts are extended. Even where such a failure sits outside an organisation’s direct control, boards should ask whether they are resilient enough to withstand the aftershocks of someone else’s collapse.

Scenario 5 – What if climate risk starts to move faster than your asset strategy?

The sector’s focus on decarbonisation — EPC ratings, net zero commitments and retrofit programmes — is necessary and right. But it may address only part of the climate challenge. In this scenario, climate risk becomes more immediate, more physical and more operational.

Severe weather events accelerate. Flooding, heat stress, storms and subsidence increasingly affect housing stock. Insurance premiums rise sharply and, in some locations, cover becomes difficult to obtain or unavailable altogether. Repair and maintenance costs escalate, while lenders and investors begin to price climate exposure more directly into the cost of capital.

At that point, the strategic question shifts from how to decarbonise existing stock to which assets remain viable in a materially different climate.

Strategy requires imagination, not just information

Taken together, these scenarios point to a common theme. The biggest risks facing housing providers over the next decade are unlikely to be neat, isolated events. They are more likely to be structural, compounding and uncomfortable — and many still sit at the edge of today’s strategic conversation.

The question for boards and executive teams is not whether any one of these scenarios will unfold exactly as described. It is whether their strategies, operating models and cultures are resilient across a range of plausible futures.

The organisations that navigate the next decade well will not simply be those with the best risk registers. They will be the ones that make a habit of asking harder questions and create the space to think beyond the immediate and the familiar.