15 August 2008
Housing associations are struggling to sell homes targeted at first-time buyers, according to a Housing Corporation survey published on August 12.
Sales of shared-ownership properties slowed further between April and July, the quarterly survey of the largest 100 developing registered social landlords found.
Existing residents of shared-ownership homes are also turning down the opportunity to buy further shares – a process known as 'staircasing' – although the survey does not contain detailed figures.
Associations that rely on surpluses from low-cost home ownership sales might struggle to meet interest payments, the survey warned. Some £10bn of credit has been set up to fund house-building and repair programmes over the next
three years.
The survey said RSLs 'could be exposed if they cannot sell properties in sufficient volumes and at appropriate prices'.
Lenders are already taking a tougher line with housing associations. In some cases, they are seeking to renegotiate existing loans when RSLs apply for further funds.
Most associations have loans agreed for the next two years, said the survey.
Of the £5.6bn that associations plan to draw down in the next 12 months, just £400m has yet to be arranged.
'Associations are still able to access new borrowing, albeit raising new money from existing funders continues to be easier than accessing funds from new lenders,' it added.
New evidence that the credit crunch is affecting regeneration emerged this week from English Partnerships. An annual index showing the value of investment, drawn up by EP with property and asset management companies, revealed that returns on properties linked to regeneration schemes fell by 6 percentage points in 2007.
At the same time, the broader Investment Property Databank index fell by 3.4 percentage points.
Steve Carr, director of policy and economics at EP, said regeneration areas tended to feel the brunt of an economic downturn sooner.
'They are having to compete with other locations much more than ever before,' he said.
PFaug2008
