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Associations commit to £8.7bn of development spend
Housing associations are contractually committed to £8.7bn of development spend over the next 12 months – a rise of £900m on their spend over the past year.
The Homes and Communities Agency (HCA) released its quarterly survey today, which draws together key financial metrics for the English sector covering the period of April to June this year.
It shows housing associations spent £7.8bn on developing and buying new housing stock in the 12 months to June, and are committed to £8.7bn for the forthcoming year.
This does not include a further £3.9bn of forecast, uncommitted spend for the same 12 months.
In the quarter, housing associations spent £2.2bn on new development – down on the £2.8bn forecast but above contractual commitments of £2.1bn. It shows housing associations have been behind their total forecast development spend for all of the last eight quarters.
Figures covering the same period, released by the National Housing Federation yesterday, showed associations started development on 9,036 new properties.
The survey also shows new lending facilities of £1.7bn were agreed in the quarter – 51% from private placements and bond finance and 49% from bank lending.
The sector’s total borrowing facilities totalled £84.5bn, of which £78.3bn is secured against its housing stock and £15.4bn is undrawn.
The survey – which covers all 231 landlords with more than 1,000 homes – also showed the sector continued to return sales receipts substantially below the figure it had forecast.
It raised £649m from the sale of homes developed for market sale and shared ownership, against forecast income of £815m. The HCA said this represented a “seasonal pattern” with peak sales generally achieved in the fourth quarter of the financial year.
It said the difference between forecasts and income is “concentrated in a small number of providers” which “remain in a strong financial position”.
The sector expects to deliver 24,876 shared ownership homes and 10,608 market sale homes over the next 12 months.
This marks a substantial rise on the 15,588 shared ownership homes and the 6,978 for market sale completed over the past 18 months.
Current tenant rent arrears rose slightly to 3.2% of total rents from 3% on average, while losses from voids remained unchanged on the previous quarter at 1.4%.
