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Global accounts 2020: housing associations’ operating surpluses fall for third consecutive year

Housing associations’ operating surpluses dropped 9.6% in the year to March 2020, reflecting the third consecutive annual decrease.

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Operating surpluses fell by 9.6%
Operating surpluses fell by 9.6%
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Registered providers recorded a combined operating surplus of £4.7bn in the year to March 2020, reflecting a 9.6% decrease from £5.2bn the year before, according to @RSHEngland #UKhousing

Global accounts data from the Regulator of Social Housing (RSH) published today showed that registered providers recorded a combined operating surplus of £4.7bn in 2019/2020, down from £5.2bn the year before.

The data represents the third consecutive fall in operating surplus since providers posted a combined operating surplus of £5.6bn in 2018.

The English regulator said the decrease was “mainly attributable” to a £300m reduction in the surplus on social housing lettings, the margin on which reduced from 30% in 2019 to 28% in 2020.

The RSH added: “The period ending March 2020 was the fourth and final year of the 1% rent reduction. Following an initial decrease in the first year of the rent cut period, costs have increased in each of the last three years.

“As a result, 2020 is the third consecutive year the surplus and margin on social housing lettings has declined.”

Forecasts suggest the sector’s operating surplus is expected to increase from 2021 onwards until 2025.


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The sector invested £13.7bn in new supply – a 13% increase on the previous year and the highest since the RSH began collecting this data.

Investment in new build social housing for rent increased from £7.7bn in 2019 to £10.2bn in 2020.

Total debt in the sector increased by £6.2bn (8%) to £83.1bn, compared with an increase of £4.4bn (6%) reported in 2019.

The RSH said the majority of this debt (59%) came from bank loans while new lending stood at £5.9bn, compared with £6.5bn the previous year.

When incorporating funds from the capital markets, the sector raised a total of £10.4bn, down from £13.5bn in 2019, with 38 providers taking out bond issues or private placements in the year. Over the year, housing associations received £1.7bn of new grant funds.

Fiona MacGregor, chief executive of the RSH, said: “This year’s global accounts show that the social housing sector was in a strong position in March 2020 with increased investment in new and existing homes and having raised more than £10bn in debt finance.

“Since then, events have been dominated by the response to the coronavirus pandemic and the long-term economic outlook is uncertain.

“The sector has responded well to the immediate challenges of the pandemic, but it is more important than ever that providers’ boards actively manage the risks they face, both financial and investment pressures, and the quality of the services they provide to tenants, while helping address the shortage of affordable housing in the country.”

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