You are viewing 1 of your 1 free articles
RSH quarterly survey: ‘robust’ financial recovery driven by record spending on development and acquisition
Investment in development and acquisition has soared to the highest level on record, new figures from the Regulator of Social Housing (RSH) have revealed.
The English regulator has published the results of its latest quarterly survey of private registered providers’ (PRP) financial health for the period from 1 October to 31 December 2021.
The survey, which asked questions of providers’ financial health, in particular their liquidity position, is based on the regulatory returns from 206 PRPs and PRP groups that own or manage more than 1,000 homes.
Associations reported record spending on new and existing homes, with investment in development and acquisition hitting £3.8bn in the quarter to December 2021 – this is 31% higher than in the previous quarter.
However, it was still 23% less than expected.
The record figure is matched by a strong yearly forecast, with providers expected to invest a further £18bn throughout the rest of the calendar year, compared with £12.5bn in the previous year.
Despite this strong investment outlook, landlords will need to carefully manage continued supply chain issues and labour shortages, alongside Section 106 and planning delays.
READ MORE
The RSH said: “The sector has continued its robust financial recovery from the coronavirus pandemic, with strong liquidity and significant quarterly and forecast investment in capitalised major repairs.”
Spending on repairs and maintenance has exceeded pre-pandemic levels, with £561m invested during the quarter – a 17% rise on the quarter previous.
Over the next year, providers expect to spend £3.2bn – a £1.1bn increase on the previous year – as they look to deliver work that was delayed during the pandemic.
The regulator reported affordable homeownership completions as “strong with an increase on previous quarter”.
However, market sale completions decreased in the quarter to below 1,000 homes for the first time since the beginning of the pandemic.
The 18-month pipeline for affordable homeownership stands at 37,208 homes and 11,198 for market sales.
Liquidity in the sector remains strong and is sufficient to fund the sector’s interest cost, loan payments and capital investments over the next year, the RSH found.
Total agreed borrowing facilities increased in the quarter, with more than half of the £3.3bn agreed in new finance came from the debt capital markets.
Will Perry, director of strategy at RSH, said: “While the social housing sector is showing strong signs of financial recovery from the coronavirus pandemic, providers will need to remain alert to external macroeconomic challenges.
“This includes the pressures of rising inflation and interest rates, along with continued supply chain disruption. To mitigate risks to their organisations and the communities they serve, boards will need to monitor these growing pressures closely.”
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
