Social housing sector continuing to access finance
Published by Max Salsbury for 24dash.com in Housing and also in Finance
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The social housing sector is continuing to access finance and manage its exposure to the housing market, according to the Homes and Communities Agency's (HCA) latest Quarterly Survey.
But the report warns that individual providers need to focus on effective risk management and financial planning if they are to meet their strategic objectives.
Key conclusions from this quarter’s survey include:
• The sector’s total reported borrowing facility is £67.9bn of which £55.8bn is currently drawn, leaving undrawn facilities of £12.1bn
• New facilities arranged in the quarter were reported by providers to total £1.2bn (September £1.3bn)
• Capital market funding and private placements contributed 84 percent of the new funding (September 60 percent)
• Over the next 12 months the sector forecasts drawdowns of £5.1bn (September £4.5bn)
• 95 percent of respondents anticipate that current debt facilities are sufficient for more than 12 months
• On Affordable Home Ownership (AHO), 2,478 first tranche sales were achieved in the quarter (September 2,554); 3,550 remained unsold (September 3,977), of which 1,611 had been unsold for over six months (September 1,505)
• There were 2,059 AHO completions and acquisitions in the quarter (September 1,993)
• Pipeline AHO completions expected in the next 18 months were 13,666 (September 11,757)
• Total asset sales of £562m (September £460m) were achieved in the quarter generating a profit of £159million (September £125m)
The HCA's latest report covers the period from October 1 to December 31 2012 and is based on a survey of all private registered providers owning and/or managing more than 1,000 homes.
Jonathan Walters, Deputy Director of Strategy and Performance, said: “The sector continues to access the capital markets as its principal source of new, long term debt. We are encouraged by investor demand in this sector and welcome the keen pricing of recent bond issues. Banks remain important to the sector, although new debt from them is generally available for shorter terms. Effective treasury management is fundamental in managing a more balanced funding portfolio.
“Asset sales for the current quarter appear strong and the number of unsold Affordable Home Ownership homes has fallen. We continue to monitor this situation in light of an increased pipeline of new properties expected in the next 18 months.
“The Quarterly Survey is an important mechanism by which we monitor key financial risks. It is essential that providers continue to supply accurate and timely data.”