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The Week in Housing: how hard did coronavirus hit housing associations’ finances?
A weekly round-up of the most important headlines for housing professionals
Good afternoon.
August, the month of summer holidays, beer gardens and English cricket batting collapses. For the social housing sector, it is the time for annual accounts to be published.
In the past couple of weeks, we have had some of the country’s biggest housing associations publish their accounts for the 2020/21 financial year.
Almost perfectly aligning with the start of the first lockdown in March last year and covering the two subsequent ones, the accounts provide us with an indicator of how social landlords fared during the 12-month period. And it clearly has had an impact.
On Monday, we reported that Clarion had seen a 28% drop in its surplus. This came after the landlord paused its long-running stock rationalisation programme due to “uncertain market conditions” caused by the pandemic.
LiveWest was another association to see its surplus fall dramatically, with an 18% drop when compared with last year. This was partially down to added costs associated with COVID-19, partially down to a one-off interest swap, but also due to the landlord spending £8m on fire safety works.
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The building safety crisis and the associated costs with fire safety work are hitting others, too. L&Q revealed in its accounts that it has committed £39m to fire safety works and had already spent £100m since Grenfell, including £20m on interim safety measures.
Hyde revealed it had spent a further £12.6m on fire safety this year, on top of the £20.2m it spent last year. However, the accounts revealed it was able to recoup £13m through legal action and by taking advantage of the government’s Building Safety Fund.
Elsewhere, a Guernsey-based real estate investor became the latest financial firm to enter the social housing world by registering a for-profit provider. RealHousingCo is backed by Alpha Real Trust, a property investor that owns assets topping £126m in the UK and overseas.
There was also more action taken by the English regulator towards lease-based providers this week. The Regulator of Social Housing deemed Auckland Home Solutions as non-compliant with its Governance and Financial Viability Standard.
The regulator raised several issues, such as some leases involving companies linked to directors of Auckland and its shareholder. It said that “on more than one occasion, Auckland sought and received shareholder approval to authorise the reported conflict of interests and disapply the provisions in its articles relating to them”.
Finally, more details were revealed about how the mega-merger between Catalyst and Peabody may pan out. Our analysis details what the new 104,000-home landlord could look like.
Jack Simpson, news editor
Editor’s picks – five must-read stories
Regulator declares lease-based provider non-compliant with warning over rents
Peabody and Catalyst merger: how the country’s second-biggest housing association will work
L&Q operating surplus increases 10% during pandemic while services struggle
For-profit snaps up 247 shared ownership homes from landlord with more deals expected
Sunak urged to offer ‘cash injection’ as study reveals four million homes in the North need upgrades
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