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Housing associations borrowed a record £4.5bn before first Brexit deadline
English housing associations borrowed a record £4.5bn in the three months leading up to the first Brexit deadline, the Regulator of Social Housing has revealed.
In its Quarterly Survey for January to March, the regulator said the £2.3bn from capital markets, £2.1bn from banks and £0.1bn from other sources added up to the most new finance raised by the sector in a single quarter on record.
Originally, the date of the UK’s departure from the EU had been set at 29 March and housing associations had told Inside Housing they were raising money to be able to cope with the risks posed by the possibility of a no-deal Brexit.
But parliament did not approve the withdrawal agreement that the government had negotiated, so this date was moved to 31 October, following a request to the EU for an extension.
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For the financial year as a whole, new debt was also at a record high, hitting £13.5bn in the 12 months to March, according to the survey.
By comparison, housing associations raised £10.1bn in the previous financial year and £7.6bn in the year before that.
During the quarter, the £4.5bn was shared between 56 providers, bringing the sector’s total debt up to £97.4bn, £59.8bn of which is from bank loans.
The survey also showed that the social housing sector has continued its expansion into market sale, even in the face of Brexit uncertainty.
Figures showed that 1,550 homes were built for market sale, with the number of unsold homes increasing by 10% to reach 1,993, the highest level ever recorded. The regulator said this was mainly due to the increase in the number being built.
Nevertheless, housing associations made only £1bn from market sales and first-tranche shared ownership sales – 17% less than the forecast £1.2bn.
The sector is forecast to continue this expansion further, with providers saying that they will build 31,901 homes for shared ownership and 13,783 for market sale over the next 18 months. This compares to 21,490 and 7,344 respectively over the past 18 months.
Fiona MacGregor, chief executive at the Regulator of Social Housing, said: “The latest Quarterly Survey results indicate that the sector continues to be in a robust position to respond to any uncertainty and changes in the wider economic environment.
“It is important that providers in these markets carefully manage their development risks and are prepared to respond to any changes in the housing market in a timely fashion.”
