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Revealed: 39 housing associations have credit ratings affirmed by Moody’s

Moody’s has affirmed the credit ratings of 39 housing associations, including some of the country’s biggest, and said the sector should remain “resilient” to the risks facing the UK.

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Moody’s reaffirms ratings for 39 housing associations despite warnings over wider UK outlook #ukhousing

L&Q, Clarion, Peabody, Places for People, Orbit and Optivo are among those to have their ratings reaffirmed by Moody’s #ukhousing

Despite changing its current outlook on the UK as a whole from ‘stable’ to ‘negative’ last week, the ratings agency said this is likely to have “limited” impact on the social housing sector.

L&Q, Clarion, Peabody, Places for People, Orbit and Optivo are among those to have their ratings reaffirmed by the agency.

Last week, Moody’s also warned that the UK’s credit rating could be downgraded as Brexit has caused “paralysis in policymaking”.

But in a boost for the sector, Moody’s said: “There are no material changes planned to the legislative or policy framework for housing associations, and the regulatory framework remains stable.”

The agency said associations faced “limited risks” from a weakening of the UK’s fiscal strength.

It added: “Housing associations have adjusted to lower levels of capital grant since 2010 and, in the past year, capital grants have increased in the form of multi-year strategic partnerships supporting long-term planning.”


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The agency noted that social rent policy is returning to inflation-linked growth which will be “credit positive for the sector’s financial performance”.

It added: “Although a lower growth environment is credit negative, Moody’s expects the sector to remain resilient.”

Some major housing associations have been pulling back on their exposure to private sales as the property market has taken a sharp downturn from Brexit-related uncertainty. In September, Inside Housing revealed that London giant L&Q has paused new development projects blaming a “serious downturn” in the market.

Moody’s acknowledged that although associations have been opening themselves up more to the commercial market, social rents still accounted for the “majority” of turnover and associations have a strong “core counter-cyclical business”.

Of the housing associations it rated, market sales accounted for less than 20% of turnover, it said.

The agency added: “In the event of a severe market downturn, although short-term pressures would emerge, Moody’s expects the majority of issuers would pull back on market sales development and liquidity would be sufficient to counteract the reduction in cash flows.”

On environmental, social and governance factors, Moody’s noted that the Grenfell Tower fire, in which 72 people died, had “encouraged higher health and safety standards and led many housing associations to increase spending on the quality of their existing stock”.

By contrast, five councils had their outlook changed from stable to negative but retained their credit rating. The five local authorities are: Aberdeen, Cornwall, Guildford, Lancashire and Warrington.

Moody’s warned of “higher systemic risk” due to a a potentially weaker sovereign rating for the councils. Higher spending pressures, particularly around social care and housing, combined with the “risk of weaker business rate growth and lower returns on commercial projects” was also a factor.

The agency also flagged “weaker sovereign institutional strength leading to the potential for further policy and legislative delays on key issues for the sector including business rates devolution and reform of the adult social care system”.

Moody's ratings for housing associations

Moody's ratings for housing associations
Housing associationRating
Alliance Homes GroupA1
B3 Living LimitedA3
Bromford Housing Group LimitedA2
Clarion Housing Group LimitedA3
Affinity Sutton Capital Markets plc
Circle Anglia Social Housing 2 Plc
Circle Anglia Social Housing Plc
Clarion Funding plc
Connexus Housing LimitedA3
Herefordshire Capital Plc
Cottsway Housing Association LimitedA3
Flagship Housing Group LimitedA2
Grand Union Housing GroupA3
Grand Union Group Funding plc.
Great Places Housing GroupA3
Hastoe Housing AssociationA3
Hastoe Capital Plc
Jigsaw Homes Group LimitedA3
L&Q GroupA3
London & Quadrant Housing Trust
LiveWest Homes LimitedA2
LiveWest Treasury plc
LiveWest Capital plc
Longhurst Group LtdA3
Libra (Longhurst Group) Treasury Plc
Libra (Longhurst Group) Treasury No 2 Plc
Midland HeartA1
Midland Heart Capital plc
Moat HomesA2
Moat Homes Finance Plc
Newlon Housing TrustA3
Notting Hill Housing Trust
GenFinance II Plc
OptivoA2
Optivo Finance plc
Orbit Group LimitedA3
Orbit Capital Plc
Paragon Asra Housing LtdA3
Paragon Treasury Plc
Peabody TrustA3
Peabody Capital No 2 plc
Peabody Capital Plc
ClwydAlyn Housing LimitedBaa1
PenArian Housing Finance Plc
Places for People Homes LimitedBaa1
Places for People Capital Markets PLC
Places for People Treasury Plc
Poplar HARCABaa2
Poplar HARCA Capital Plc
Radian Group LimitedA3
Radian Capital Plc
Radius Housing Association LimitedA1
Riverside GroupA1
Riverside Finance Plc
Saffron Housing TrustA3
Saffron Housing Finance Plc
Sanctuary Housing AssociationA2
Sanctuary Capital Plc
Saxon WealdA3
Saxon Weald Capital plc
Southern Housing Group LimitedA3
Sovereign Housing AssociationA2
Sovereign Housing Capital, PLC
Stonewater LimitedA2
Stonewater Funding plc
The Guinness Partnership Ltd.A2
Together Housing GroupA3
Together Housing Finance Plc
Walsall Housing Group LtdA3
WHG Treasury plc
Citizen Housing Group LimitedA2
Citizen Treasury 2 Plc
Citizen Treasury Plc
Yarlington Housing GroupA3
Yarlington Treasury Services PLC
Yorkshire Housing LimitedA3
Yorkshire Housing Finance plc

 

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