The 2017 Global
accounts of private registered providers, published by the Regulator of Social
Housing, shows that the sector delivered another strong year of investment in
new and existing social housing properties.
Based on analysis of
submitted regulatory returns and statements, the annual publication provides an
overview of the financial status of private registered providers of social
housing who own or manage at least 1,000 homes.
The main findings
for 2017 are:
- The sector invested £10bn in
new housing supply (including social housing, as well as investment in
properties for sale, and market rent) and £1.6bn in existing stock. Total
investment of £11.6bn represents a 15% increase on 2016.
- Of this, investment in new
and existing social housing stock was £7.9bn, including £6.3bn in new
rental supply – an increase of £0.7bn on 2016. Investment was funded by
past surpluses, debt and grant and resulted in the completion of 41,000
social homes for rent.
- Turnover was unchanged at £20
billion, as providers have implemented the 1% rent reduction on general
needs units (required under the Welfare Reform and Work Act 2016), offset
by additional rental income from new properties.
- Operating margins have
increased by 2% to 30%, through reductions in operating expenditure –
social housing costs per unit decreased by 7% to £3,698, with reductions
in both management and maintenance costs.
- Total debt held by the sector
increased by £2.9bn to £69.6bn.
- Interest cover was again
strong at over 200% excluding one-off breakage costs, servicing existing
debt and supporting additional investment
- The underlying net surplus
was £3.5bn – a 7% increase on 2016, with reported net surplus of £4.1
billion. The reported net surplus is increased by the one-off gains
reported on mergers of £0.6bn and is not indicative of recurring
performance.
Fiona MacGregor,
Director of Regulation said: "This year’s figures show that the social
housing sector is continuing to invest substantially in existing stock and new
supply and as a whole is well-placed to respond to the changing operating
environment.
"The sector has
consolidated over recent years and there are now a small number of very large
providers; significant changes in these providers can have a material effect on
sector results.
"The
year-on-year decrease in management costs and major repairs expenditure
demonstrate how the first 12 months of rent reductions have been managed. While
the lower repairs spend partly indicates the progress being made towards
reducing non-decent stock we will continue to encourage providers to have a
rigorous, evidence-based approach to expenditure and investment, which ensures
that housing is sustainable for the long term, responds to tenant needs and
gives good value for money.
"The 2016
Global Accounts were published in February 2017. In response to sector feedback
that an earlier publication date would help providers to compare their
performance against their peers more easily, we have brought forward the
publication date compared to previous years."
