Social housing sector remains financially strong - report
Published by Max Salsbury for 24dash.com in Housing and also in Finance, Regulation
Business mood brightens despite recession
The UK's social housing sector remains in a financially strong position, according to the Homes and Communities Agency's latest quarterly survey.
The report concludes that the sector continues to have access to sufficient finance, with 92% of providers having sufficient facilities to last 12 months or more. New facilities of £2.1 billion were arranged in the quarter, with 74% coming from capital market funding including private placements.
According to the HCA, the sector is continuing to develop and sell affordable home ownership (AHO) properties; 2,121 sales were achieved in the quarter (2013/14 Quarter 3) and the stock of unsold properties reduced to 2,751. The number of AHO properties forecast to be developed in the next 18 months increased to 18,886. The regulator says that this indicates a potential increase in sales activity, meaning that providers must "manage the associated risks effectively".
Year to date total revenue from asset sales is £1.8bn, a 20% increase compared to December 2012.
The HCA undertakes a quarterly survey of housing providers to establish the levels of exposure to a range of risks. The latest report is based on a survey of all private registered providers owning and/or managing more than 1,000 homes for the quarter ending 31 December 2013.
Jonathan Walters, HCA deputy director of strategy and performance, said: “This quarter’s survey indicates that the sector continues to manage its risk exposure in respect of affordable home ownership sales and its mark-to-market collateral position. The sector as a whole remains financially strong with £11.3bn undrawn borrowing facilities in place.
“Whilst it is difficult to draw conclusions at this early stage, the sector has so far been able to manage the impact of welfare reform on their cash flows. The regulator will continue to monitor income collection to ensure that providers effectively mitigate any downside risks to their financial position.”