Sector bond aggregator makes loss amid ‘challenging’ capital markets

The firm said the effects of higher interest rates meant public bond issuance continued to be limited, with housing associations able to wait for interest rates to fall or secure short-term facilities while rates are high.

This has had “consequent impact on providers of long-term funding including but not limited to the company”, it said.

Despite the loss, the firm said its business model continued to show “strength and resilience”, including “tight management and strong cost control” and the completion of two new loans.

These were a loan in December for £13.2m to Soho Housing, and a £13m loan in March to Elim Housing.

The bond aggregator works by subscribing housing associations as shareholders, who can then access finance at favourable terms, and issuing debt on the capital markets.

Overall, MORhomes’ lending grew year-on-year to £538.6m in 2024-25, after extending no loans the previous year.

It also said that ratings agency S&P Global had affirmed its A- credit rating in December 2024 and that it was continuing to “address the reasons given for the negative outlook”.

At the time, S&P said its negative outlook reflected “risks that MORhomes’ loan portfolio growth will remain very slow, if there is any, which will likely prevent the company from becoming structurally profitable”.

MORhomes said it felt it was well positioned to secure a bigger share of housing association lending “as volumes recover”.

Malcolm Cooper, chair of MORhomes’ board, said: “We believe that the company is in a good position to maintain its credit strength and consequently continue to provide an alternative source of new loans to shareholders.

“The anticipation is that housing associations see the benefit to the sector of having access to a financial intermediary with the advantages described in this report and use it to an ever greater extent.”