Social housing sector continues to generate income and remains financially strong

The social housing sector once again continues to access sufficient finance and manage its exposure to the housing market, according to the latest quarterly survey (2013/14 quarter 1) published by the Homes and Communities Agency 2nd September.

As the Regulator of social housing providers, the HCA undertakes a quarterly survey of housing providers to establish the levels of exposure to a range of risks faced by the sector. This 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 2013.

Arrangement of new borrowing facilities in the quarter was low at £0.6billion – compared to £1.2billion arranged in the last quarter of 2012/13. This reduction in activity is due to a large number of providers having secured sufficient finance to fund development programmes through to March 2015. Total asset sales of £472million were in line with recent trends and mark-to-market exposure on standalone derivatives eased slightly as a result of swap rate increases in the quarter.

The survey also highlights the fact that despite the challenging economic environment, the number of Affordable Home Ownership homes that are unsold has fallen by over 10% in the quarter.

Jonathan Walters, Deputy Director of Strategy and Performance, said:

“This quarter’s survey results indicate that the sector as a whole remains financially strong with £11.6billion undrawn borrowing facilities in place and £3.5billion in cash. The sector also continues to generate significant income from a range of sales activities which are both reducing their overall debt requirements and helping to deliver much needed social housing.

“However, the operating environment continues to be challenging. In particular, income collection is likely to require more active management in light of welfare reforms, for example. Providers must continue to focus on risk management and robust financial planning to meet their strategic objectives.”

Download the latest quarterly survey