Landlord chief executive hits back at ratings agencies

Neil Hadden, chief executive of Genesis, said ratings agency Moody’s was “obsessed” with ensuring that income from housing associations was generated from social or affordable rent.

He said the agencies needed to change their approach to reflect the “new paradigm” of the housing association sector, which has made a rapid expansion in its homeownership activity in the last year.

Yesterday, Moody’s downgraded Genesis’ credit rating from A2 to Baa1, meaning it joins Poplar Harca as the weakest among the 41 housing associations that Moody’s rates.

Moody’s said its plans to expand development would “exert downward pressure on their key metrics” and concluded its “increased commercial exposure leads to increased reliance on the housing market remaining buoyant”.

At Housing 2016, the CIH conference and exhibition, Mr Hadden said landlords “need to get across to ratings agencies” that “the model has changed”.

“Moody’s are obsessed with making sure that the cash we bring in is generated by social renting or affordable renting,” he said. “That is not going to be the model going forward.

“Why aren’t we reflecting that in our development programmes? Why aren’t ratings agencies also reflecting the new paradigm in the way they rate housing associations?”

Moody’s predicts that sales will account for 54% of Genesis’ turnover by 2020.

In a note on the sector published this morning, Moody’s said: “We expect economic uncertainty to have a negative impact on the property market… This will negatively affect those [housing associations] with a higher exposure to outright market sales and shared ownership products.”

Genesis said yesterday it would look again at its pipeline following the Moody’s rating.

Along with the rest of the housing association sector, Genesis also yesterday received a negative outlook due to the UK’s referendum vote last week to leave the European Union.