Landlords increase investment in housing by 15%

13 Dec 17

Housing associations increased their investment in housing by 15% in the past year, regulator the Homes and Communities Agency has said.

In its global accounts for the sector – based on returns from landlords with at least 1,000 homes and released yesterday – it said £10bn was invested in new homes and £1.6bn in existing ones, giving a total increase of 15% over the 2016 position.

Of this, investment in new and existing social housing stock was £7.9bn, seeing the completion of 41,000 social homes for rent. The remainder was spent on properties for sale, market rent or other tenures.

Turnover was unchanged at £20bn, with the impact of the government-imposed 1% rent reduction on general needs homes offset by additional income from new properties.

Total debt held by the sector increased by £2.9bn to £69.6bn in 2017, while interest cover was judged strong at more than 200%.

Operating margins have increased by 2% to 30%, through social housing costs per unit decreasing by 7% to £3,698, with reductions in both management and maintenance costs.

HCA regulation director Fiona MacGregor said: “This year’s figures show that the social housing sector is continuing to invest substantially in existing stock and new supply and as a whole is well-placed to respond to the changing operating environment.

“The year-on-year decrease in management costs and major repairs expenditure demonstrate how the first 12 months of rent reductions have been managed.”

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