Sector remains ‘financially strong’ despite challenges

New finance of £2.8bn was agreed in the quarter, including £1.6bn from banks and £1bn from capital markets.

regulation

The latest Quarterly Survey, published today (26th November) by the Regulator of Social Housing, shows that despite facing some challenges with regards to margins, the sector maintains a “stable financial performance.”

According to reports, the regulated sector has access to £21.6bn of undrawn facilities and agreed new finance of £2.8bn in the quarter.

As reported by 24housing in the quarter to September, figures stood at £20.4bn in undrawn facilities and an agreed new finance of £1.4bn – with the latest numbers showing a considerable rise.

However, during the quarter, 3,576 Affordable Home Ownership (AHO) units were developed and 3,773 units were sold – a 5% decrease in the number of unsold units to reach 6,688 at the end of September.

Margins on AHO sales averaged 23.3% in the quarter, the lowest rate achieved in the last three years.

The other main findings for the quarter include:

  • Cash balances total £5.2bn; this is forecast to reduce over the next 12 months to £3.4bn, as cash is used to fund planned capital expenditure
  • Loan repayments of £0.6bn were made in the quarter
  • Cash interest cover, excluding current asset sales, was 149% in the quarter to September 2019 against a forecast of 136%. Interest cover is forecast to average 128% over the next 12 months as expenditure on capitalised repairs and maintenance is expected to increase
  • Including both current and fixed asset sales, total sale receipts were £1.4bn in the quarter, generating surpluses of £0.4bn. Current asset sales receipts were 23% below the forecast of £1.2bn
  • In the 12 months to September 2020, the sector is forecasting £5.5bn worth of current asset sales and £1.7bn of fixed asset sales. By comparison, in the 12 months to September 2019, current asset sales were £3.4bn and fixed asset sales were £1.8bn
  • Net debt is forecast to increase by £5.3bn

The Regulator has stated that it will continue to monitor developments in the housing market closely and engage with providers with significant exposures to market and AHO sales.

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