Housing associations are demonstrating that they have the financial capacity to survive the downturn without adversely impacting on delivering services to tenants. Their actions in managing their businesses have enabled them to withstand the turbulence in the financial markets. The Association?s watchdog, the Tenant Services Authority, said they are thriving in the continuing difficult housing and credit market conditions.
The Authority?’s latest survey shows that 92 associations reported impairment charges totalling £174 million because the value of their homes and land has dropped. This is an increase of nearly 40 per cent on the previous quarter?s estimate, but it represents less than 0.5% of the associations? total assets, and none of the associations have reported financial difficulties or are in breach of covenants in their loan agreements with lenders because of the charges.
The survey also shows that the number of unsold low cost home ownership homes has continued to fall, a drop of 7 per cent to 8,173 homes, suggesting that the property market is stabilising. Housing associations also converted less unsold low-cost home ownership homes to rented social housing, down from 2200 to 344, indicating that associations have been more successful in selling their empty homes. Just over a third of low cost homes are currently reserved for sale.
Associations have £4.7 billion of the £5 billion debt needed over the next 12 months already in place. £7.1 billion of new loan facilities were arranged between April 2008-March 2009.