The social housing sector continues to access sufficient finance and manage its exposure to the housing market, according to the latest Quarterly Survey (2012/13 Quarter 4) published by the Homes and Communities Agency.
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 31 March 2013.
The trend towards capital market funding continued in 2012/13, with £3.8bn (2011/12 £1.5bn) being raised through public bond markets and private placements during the year. This represented 70% of the new funding raised in 2012/13. Although this represents a significant shift in sources of funding, traditional bank lending continues to represent 83% of the total agreed facilities. As more PRPs access the capital markets and seek alternative sources of funding, it is important that they understand and manage the risks inherent in different forms of debt.
Jonathan Walters, Deputy Director of Strategy and Performance, said: “This quarter’s survey results indicate that the sector as a whole remains financially strong - as demonstrated by the £3.8bn being raised in the capital markets. However, the operating environment continues to be challenging. Individual providers must continue to focus on risk management and robust financial planning to meet their strategic objectives.
“Despite the challenging economic environment, asset sales for the current quarter appear strong and the number of Affordable Home Ownership homes that have been unsold for over six months has fallen. We continue to monitor this situation in light of an increased pipeline of new properties expected in the next 18 months.”
This survey includes additional private finance information that the regulator collects annually. The sector’s debt repayment profile shows that the sector continues to manage refinancing risk, with 2.6% of outstanding debt due for repayment in the next two years and over 89% of debt due for repayment in five years or more. Around two thirds of the sector’s debt is fixed for periods of more than one year which provides a degree of certainty in respect of future interest costs.
