By Neil Merrick
20 August 2009
Falling land values during the recession have cost housing associations a total of £174m in impairment charges, figures reveal.
Ninety-two associations with land banks that have dropped in value in the past 12 months recorded write-downs in their 2008/09 accounts, according to the Tenant Services Authority’s latest quarterly survey.
In May, the TSA reported that 77 associations were likely to make write-downs worth £125m. But, in spite of the increase, the authority remains generally upbeat about how the sector is coping with the downturn in the housing market. The charges represent less than 0.5% of property and other assets owned by the registered social landlords affected and are significantly lower than those incurred by private house builders.
‘None of the associations have reported financial difficulties or are in breach of covenants in their loan agreements with lenders,’ according to a TSA report published on August 12.
The number of unsold homes built by RSLs for shared ownership fell for the second quarter running, from 8,742 to 8,173, while fewer homes that were initially built for sale were being converted to social rented housing.
RSLs arranged a total of £7.1bn in new loans during the 12 months to March 2009, mostly through banks, although a small number of associations were raising money through bond issues.
TSA executive director Clare Miller praised RSLs for the way they had responded to turbulent market conditions.
‘Housing associations are demonstrating they have the financial capacity to survive the downturn without adversely impacting on delivering services to tenants,’ she said.
Meanwhile, the TSA and the Audit Commission have promised not to increase the burden on councils once the authority starts to regulate local authority housing departments next year.
The commission will continue to inspect councils, while the TSA will share information required for comprehensive area assessments.
20 August 2009
Falling land values during the recession have cost housing associations a total of £174m in impairment charges, figures reveal.
Ninety-two associations with land banks that have dropped in value in the past 12 months recorded write-downs in their 2008/09 accounts, according to the Tenant Services Authority’s latest quarterly survey.
In May, the TSA reported that 77 associations were likely to make write-downs worth £125m. But, in spite of the increase, the authority remains generally upbeat about how the sector is coping with the downturn in the housing market. The charges represent less than 0.5% of property and other assets owned by the registered social landlords affected and are significantly lower than those incurred by private house builders.
‘None of the associations have reported financial difficulties or are in breach of covenants in their loan agreements with lenders,’ according to a TSA report published on August 12.
The number of unsold homes built by RSLs for shared ownership fell for the second quarter running, from 8,742 to 8,173, while fewer homes that were initially built for sale were being converted to social rented housing.
RSLs arranged a total of £7.1bn in new loans during the 12 months to March 2009, mostly through banks, although a small number of associations were raising money through bond issues.
TSA executive director Clare Miller praised RSLs for the way they had responded to turbulent market conditions.
‘Housing associations are demonstrating they have the financial capacity to survive the downturn without adversely impacting on delivering services to tenants,’ she said.
Meanwhile, the TSA and the Audit Commission have promised not to increase the burden on councils once the authority starts to regulate local authority housing departments next year.
The commission will continue to inspect councils, while the TSA will share information required for comprehensive area assessments.
