This was the stark conclusion of the National Housing Federation's annual global accounts for 2000/01.
The report said that turnover for the sector rose 14% on the figures for 1999/2000, but it said housing associations might not be able to manage this growth.
It said: "Growing debt and interest costs will need to be monitored to ensure that they remain manageable in the future as interest coverage approaches critical levels."
National Housing Federation policy officer Janine Relph, author of the accounts, explained: "A great many associations have a conservative approach, but there are some that are not being careful with their attitude to growth.
"You have to make sure you temper growth with cost-efficiency control."
The report also highlighted concerns over the future attitude of lenders towards housing associations.
A number of social landlords need to keep a close eye on their ability to service their debts
Malcolm Kitchener, Nationwide
The NHF noted that to date, the relationship has been "cosy". But this could change if lenders feel the sector represents more of a risk for their money and raise the cost of finance as a result.
Malcolm Kitchener, chief manager of social housing at lender Nationwide, felt this was unlikely in the short term.
He said: "The reason people would pull out of markets is [declining] returns.
"The issue around gearing [the amount of debt a business has relative to its equity] is not really whether it has gone up, but whether it is sustainable."
Kitchener added that although he thought this was not yet a problem, "a number of registered social landlords need to keep a close eye on their ability to service their debts".
He said he thought areas such as large housing benefit arrears – which afflict a number of housing associations – could cause future cash flow problems for RSLs.
Source
Housing Today
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