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Social housing sector is 'financially stable' says HCA, as money pours in from capital markets

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Social housing sector is 'financially stable' says HCA, as money pours in from capital markets

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Published by Max Salsbury for 24dash.com in Housing and also in Central Government, Finance, Regulation

Social housing sector is 'financially stable' says HCA, as money pours in from capital markets Social housing sector is 'financially stable' says HCA, as money pours in from capital markets

The Homes and Communities Agency has said that the social housing sector "continues to demonstrate financial stability and has access to sufficient finance".

The HCA's latest quarterly survey (2014/15 Quarter 1) reveals that the sector is overall in a "strong position in relation to its future financing needs" with £13 billion in undrawn borrowing facilities and £4bn held in cash.

The HCA's 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 30 June 2014.

New facilities arranged in the quarter totalled £1.1bn.

According to the regulator, investors’ confidence in the sector was demonstrated by a continued trend towards capital market funding. Over half of the new funding came from capital markets including the first long term government guaranteed bond arranged through Affordable Housing Company plc, which raised £180 million for English providers.

There were 2,116 'affordable homeownership' sales reported in the quarter, with the stock of unsold 'affordable' homes falling to 2,985.

The report also includes information relating to properties developed for market sale – the forecast pipeline for completions over the next 18 months anticipates a marked increase in activity, averaging 879 homes per quarter.

Mick Warner, HCA deputy director of regulatory operations, said: “The sector as a whole remains financially strong with £13bn undrawn borrowing facilities in place. Most of the sector’s forecast debt requirement over the next two years is to fund development programmes.

“The number of unsold AHO and market sales homes fell in the quarter and sales risk is concentrated in relatively few providers. However, pipeline figures for AHO and market sale development in the next 18 months forecast a level of new supply significantly in excess of current sales volumes.

“The July announcements, by HCA and GLA of £1.3bn allocations to deliver over 60,000 new homes, will give providers greater clarity of their future debt requirements.

“As regulator, we remind providers to ensure that they secure facilities well in advance of need so that they can meet their financial commitments in an orderly manner.”

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