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31% increase in market sale by housing associations

Housing associations sold 31% more homes on the open market in the last quarter than the previous one, the Regulator of Social Housing (RSH) has said.

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Private residential flats in London (Picture: Getty)
Private residential flats in London (Picture: Getty)
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Regulator reveals sharp increase in homes sold by housing associations

The RSH’s quarterly survey revealed that 1,171 market sale units were sold in the period from October to December 2017, up from 897 in the quarter before. It was also a 7% increase on the same period in 2016, when 1,094 units were sold.

Revenue from these sales was lower than forecast, however, standing at £700m, compared to the forecast of £834m.

According to the regulator, the difference between forecast and current asset housing sales “is concentrated in a small number of providers”.


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The report added: “Variances have been attributed to slower sales and to delays in development programmes.

“Where sales revenues are lower than forecast, the regulator has sought assurance that the individual providers have sufficient access to liquidity and that the delays do not have a material impact on viability.”

Associations spent less than forecast on acquiring and developing housing for the ninth quarter running, investing £2.8bn compared to the forecast of £3.5bn.

Overall, according to the report, “relatively few” associations developed for outright sale in the quarter. At the end of the period, half the unsold market sale stock in the whole sector was held by just seven associations.

The RSH expects market sale activity in the sector to increase further, with the pipeline for completions in the next 18 months standing at 11,429, up from 10,930 in September. In the 18 months up to December, there were 6,838 market sale completions.

It expects the sector to invest £14bn in new housing supply over the next 12 months – £9.3bn of which is contractually committed.

The survey also reported that associations had agreed £4.1bn of new finance from banks and capital markets in the quarter.

This was a significant increase on the previous quarter, in which associations raised £1.9bn, but slightly down on the same quarter in 2016, when associations raised £4.3bn. Total agreed borrowing facilities are now £88.4bn, 66% of which are bank loans.

Repairs and maintenance spending, which the regulator warned in December had been slashed to pay for the rent cut, was below forecasts. Capitalised repairs and maintenance expenditure in the quarter was £423m, compared to a predicted £535m.

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