William Eichler 17 February 2017

Social housing sector has ‘solid’ year of investment

Social housing sector has ‘solid’ year of investment

The social housing sector has had a ‘solid’ year of investment underpinned by strong in-year financial performance, according to the Homes and Communities Agency.

The 2016 Global Accounts of private registered providers, published today by the agency, provides an annual overview of the financial status of the social housing sector.

It found last year over £7.5bn was invested in new and existing stock as the sector continued to leverage the surpluses generated on its trading activity.

It also revealed the development of new properties for both shared ownership and outright sale increased markedly in 2016 – a 39% increase in total turnover from this activity on the previous year.

Group turnover increased in the year by 8%. Despite increases in sale and other non-social housing activity, three quarters of total turnover continues to come from social housing lettings.

Debt increased by £2.2bn in the year to fund capital expenditure, the Accounts showed.

And improved operating margins and stable costs of debt contributed to an increase in interest cover while increasing property values contributed to gearing remaining stable.

Fiona MacGregor, director of regulation, said: ‘The 2016 Global Accounts shows a steady picture in the sector overall with substantial ongoing investment in new and existing properties.

‘This is despite the increase in debt being lower than that reported in 2015.

‘A marked increase in turnover from commercial activities is an indicator of how providers are maintaining development levels in a more uncertain operating environment.

‘We will remain vigilant as providers continue to adapt, and expect their risk management and mitigation approaches to keep pace with their activities.’

 
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