RSH reports strong financial performance

Cash interest cover excluding sales was 25% higher than expected.

Monday 1

The Regulator of Social Housing has released its latest survey, finding that the sector’s operational performance has been exceptionally strong, exceeding expectations.

The survey found that cash interest cover excluding sales was at 165% – compared to a forecast 140%.

The survey report published today (26th November) covers the period 1 July 2018 to 30 September 2018 and includes forecasts up to 30 September 2019, and is based on responses from 229 private registered providers (PRPs) and PRP groups who own or manage 1,000 homes or more.

The survey also found that the sector has £18.6bn in undrawn facilities and £6.6bn in cash; investment in housing supply at £2.6bn was below forecast; the sector forecasts spending £15.5bn on new supply over the next 12 months (£4.9bn relates to expenditure not yet contractually committed); total sales of £1.3bn were in line with the previous quarter and represented a 19% increase compared to a year ago; and the total stock of unsold properties was mostly unchanged at around 6,100 units.

The survey also reported that the number of properties unsold for more than six months increased by 39% for affordable home ownership units and 33% for market sale units.

Further, the pipeline of properties being developed for sale remains in line with the previous quarter, with an expected delivery of 5,000 low-cost home ownership units and 2,200 sale units per quarter over the next 18 months.

RSH Chair of the Board Simon Dow plans to tell delegates at the 26th November Savill’s seminar: “The Quarterly survey we have published today shows that the number of properties in the sector unsold for more than six months has increased.

“This is in line with the run rate on completions and wider market conditions, but as we set out in our Sector Risk Profile, it demonstrates that sales risk is an increasingly important risk for providers to manage.

“It is crucial that PRPs undertake challenging stress testing covering the crystallisation of multiple risks from a macro-economic shock or wider market downturn.”