industry news
Financial stability in the social housing sector continues
T
he social housing sector remains in a strong financial position with access to sufficient finance, according to the latest
quarterly survey published by the Homes and Communities Agency on 2 March. The survey shows registered providers’ financial
position on the 31 December 2015 and includes forecasts up to 31 December 2016. The quarterly survey is one of the ways in which the regulator monitors and reports on the financial health of the sector as part of its robust approach to supporting the sector’s financial viability and helping to support providers’ contribution to new housing supply. The 2015/16 Q3 survey (October to December)
reports that the sector has access to sufficient finance, with £14 billion in undrawn facilities and £5.6 billion held in cash, and with 97 per cent of providers having sufficient debt facilities to last for more than 12 months. The sector continues to forecast strong
operating cashflows. Cash interest cover over the 12 months up to 31 December 2016 is projected to be 184 per cent. Over this period forecast net operating cashflow is £5.7 billion. This includes £3.0 billion current asset sales. Cash is forecast to reduce to £4.1 billion over
the next 12 months, and most of the sector’s forecast debt requirement over the next 12
months continues to be to fund development programmes. Cashflow forecasts show that the sector plans to invest £9.1 billion in housing supply over the next 12 months. Figures from the survey demonstrate continued
investor confidence in the sector. New facilities arranged in the quarter totalled £1.2 billion (September: £1.8 billion) of which 55 per cent came from banks; capital market funding contributed 45 per cent; two own name bond issues raised £500 million. Fiona MacGregor, Director of Regulation at the
HCA, said: “It is encouraging that registered providers continue to report that they have access to sufficient finance. The December Quarterly Survey shows that providers are forecasting investment of over £9 billion in additional housing supply over the coming year, so it will be important that providers ensure that secured facilities are available to cover their forecast drawdowns over the next 12 months. “Providers are also forecasting a significant
pipeline of properties for sale over the next 18 months both for shared ownership, and increasingly for outright market sale. We expect providers to manage their development pipelines carefully and will continue to monitor sales forecasts and seek assurance if a provider reports a large increase in unsold properties.
“In aggregate, providers continue to have
headroom on available collateral, however, there have been significant movements in swap rates since December and individual providers must ensure they have sufficient available security should there be an increase in mark to market exposure.
“The 2015/16 Q3 survey (October to December) reports that the sector has access to sufficient finance, with £14 billion in undrawn facilities and £5.6 billion held in cash, and with 97 per cent of providers having sufficient debt facilities to last for more than 12 months”
“We continue to engage with these providers to
seek assurance that they are managing the associated risks, in particular that they will be able to meet any potential additional cash calls.”
£600,000 facelift for Salford’s ‘steel’ homes A
major improvement project to modernise more than 60 steel-built homes in Salford is gathering pace.
Housing association Salix Homes, which owns
more than 8,300 homes in central Salford, is working alongside Oldham-based building specialists Emanuel Whittaker to transform 67 homes on the Weaste Steel estate. The estate, built in 1948, is made up of
pre-fabricated-style homes, known as British steel framed houses, which were designed and produced by the British Iron and Steel
Federation (BISF). The non-traditional method of construction
became popular following the Second World War as part of a major homebuilding plan to address the housing shortage at that time, as the properties could be built much quicker than traditional brick-built houses. The £600,000 renovation project will see the
properties fitted with new kitchens, bathrooms, windows, doors, electrics and heating systems, as well as given an external facelift and re-painted. Mark Foster, head of investment at Salix Homes,
said: “These steel-framed homes in Weaste represent a real piece of history, but are in great need of modernisation, so this project marks a key milestone in our £22 million investment programme that we are delivering to homes and communities across the city over the next
two years. “Unlike other types of pre-fab homes, these
steel-framed houses were built to stand the test of time and have a similar life-expectancy to a traditional brick-built home, but after suffering from lack of investment over the years, we are confident that our improvement programme will ensure these properties are brought back into the 21st century, creating modern and desirable homes that our tenants can continue to be proud of.” Following the transfer of more than 8,300 homes from Salford Council to Salix Homes last
year, the housing provider is carrying out much-needed improvements to 2,200 homes in Salford over the next two years. John Gallagher, director at Emanuel Whittaker,
said: “Modernising these types of properties can be quite complex and requires a different skill set than usual, however, our knowledge and expertise means we are looking forward to tackling this challenging job. “We will also ensure that we look after the needs
of residents during the works to keep disruption to a minimum and maintain our 100 per cent satisfaction rates.”
www.housingmmonline.co.uk | HMM March 2016 | 23
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