01
About the Utility
Affinity Water Limited is a shareholder-owned water-only company in England. It abstracts, treats and distributes drinking water for household and business customers, while sewerage lies outside its remit. Ofwat sets its revenues, expenditure allowances and service commitments through five-year price controls, the Drinking Water Inspectorate reports on its water quality, and the consumer body CCW monitors its complaint handling. Debt is raised through bonds issued by financing subsidiaries, with Class A ratings of A3, BBB+ and BBB+ from Moody’s, S&P and Fitch, and shareholders provided a committed £150 million equity injection in 2025-26. Long-term resource planning is organised by region.
02
Water System
The defining operating constraint is environmental as well as hydrological. Affinity Water’s drought plan committed to cutting abstraction from chalk catchments by 27 Ml/d by 2025, which raises the premium on demand and leakage control. Demand has proved stubborn: Ofwat found that consumption per person rose over 2020-25, and the company missed its per capita consumption commitment in the latest year. Long-range planning leaves little headroom, projecting the Southeast region moving from a small surplus to a deficit by 2045 that widens by 2080. The pressure surfaced in July 2026, when a temporary hosepipe ban took effect across the Central region, later extended to Essex’s Tendring peninsula.
03
Infrastructure & Performance
Network performance is mixed. Leakage was 149.11 Ml/d in 2025-26 and the leakage reduction commitment was missed, yet mains repairs and supply interruption times met their targets, and Ofwat counted Affinity Water among the companies that cut interruption durations most over the last price control. Water quality is the sharper concern. The compliance risk index exceeded its deadband, and the Drinking Water Inspectorate placed the company above the industry event risk index for 2025, citing the unapproved installation of membrane treatment modules. Customer service has also slipped, with a C-MeX score ranked 13th.
04
Investment & Priorities
Investment is stepping up under the 2025-30 price control. Ofwat’s final determination allows £490 million more total expenditure than in the previous period, and the company’s delivery plan pairs that allowance with a capital enhancement programme. Capital expenditure has risen in each of the past three years, and renewal programmes replaced 41.9km of mains in the latest year. The settlement also raises average household bills by £49 by the end of the period, before inflation.
Capital expenditure
Affinity Water Limited capital expenditure in the year, £ million, 2018-19 to 2025-26 (years ending 31 March)
Reported actuals as stated in each year's annual report; values are not adjusted for inflation.
Sources: Affinity Water Limited Annual Reports and Financial Statements 2018/19 to 2025/26.05
Sustainability & Resilience
Resilience is as much financial as physical. Ofwat’s financial resilience review for 2024-25 found regulatory gearing significantly above the notional level and kept Affinity Water under elevated and enhanced monitoring. Shareholders have since provided their committed equity, and the company reported year-end gearing of 69.1% on its own measure and 72.54% on the regulatory basis. Reported scope two emissions far exceed direct scope one emissions, and existing solar assets meet only a small share of energy consumption.
06
Key Challenges
- Restoring drinking water quality after a compliance risk index above its deadband and findings on unapproved treatment membranes.
- Reducing leakage and per capita consumption after missing both commitments, while cutting abstraction from chalk catchments.
- Maintaining supplies through dry summers as the long-term supply-demand balance narrows.
- Delivering a larger 2025-30 programme as average household bills rise, under close Ofwat financial scrutiny.