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Our bond deal demonstrates an expectation that the sector will bounce back quickly
Our focus is on the here and now but we must also lay the foundations to tackle the economic crisis that will follow, writes Paul Hackett
Housing associations are uniquely placed to support communities through the coronavirus crisis and to help kick-start economic recovery when the UK emerges from lockdown.
Readers of Inside Housing may have seen the news that Optivo issued a £250m benchmark bond earlier this week at a coupon of 2.857%. We had bids of £1bn to buy the first slug of £150m. We’re retaining a further £100m to sell later.
At this time of national crisis, the sector should take comfort from this sale. This is a sign of confidence in the sector’s financial strength and an expectation that we’ll bounce back quickly once the nation emerges from lockdown.
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Like other housing associations our priority right now is supporting our residents and our staff. This means signing up to the National Housing Federation’s shared commitments:
- Keeping people secure at home
- Helping people to get the support they need
- Acting compassionately and quickly where people are struggling
Putting this into practice will mean different things for different housing associations.
For Optivo we’re stepping up the support we’re giving to older and vulnerable people, diverting resources into helping residents claim benefits and manage their finances, and ensuring we’re geared up to deal with the social and emotional impact of 90,000 of our residents staying at home.
We’re already seeing an increase in calls about anti-social behaviour, nuisance and domestic violence, and our highly trained and dedicated staff are doing an excellent job to help.
Like a number of other large housing associations we’re major providers of key worker housing linked to NHS Trusts and have seen an increase in demand for our accommodation.
And we’re also compassionate employers – working hard to support our staff to get through this emergency, with virtual working and more flexible approaches.
Although it’s difficult to think beyond the immediate crisis, it’s important we start planning now for a time that is actually not that far away.
As our bond sale shows, there’s light at the end of the tunnel. Investors bake in assumptions about future performance into their pricing.
Yes, our spread is wider than it would have been four weeks ago, but an additional margin of only around 80 to 100 basis points indicates great confidence in the sector.
When the immediate public health crisis has passed, our attention must turn to the global recession that will follow. Housing associations as long-term investors in communities stand ready to help government and the construction industry kick-start growth.
Thousands of SMEs, sub-contractors, consultants and tradespeople will need our help to get Britain building again. The sector has shovel-ready sites and plans to invest billions in building safety and de-carbonising millions of homes.
Although our focus must be on the here and now – on doing our bit to overcome the immediate humanitarian crisis – it’s also important that we lay the foundations today to tackle the economic crisis that will surely follow.
Paul Hackett, chief executive, Optivo
