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20.02.17

Government hails ‘solid’ year of investment for social housing

The social housing sector has enjoyed a “solid year” of investment underpinned by strong in-year financial performance, the 2016 Global Accounts of private registered providers published by the Homes and Communities Agency (HCA) has revealed.

The report gives an overview of the financial status of the social housing sector for the year up to 31 March 2016, based on analysis of the regulatory financial returns and statements that are submitted by private registered providers managing or owning 1,000 or more homes.

It found that over £7.5bn had been invested in new and existing stock, and that the development of new properties for both shared ownership and outright sale increased by 39% in total turnover from the same time last year.

Debt was also found to be on the rise, going up to £2.2bn in the year to fund capital expenditure.

Commenting on the findings, Fiona MacGregor, director of regulation at the HCA, said: “The 2016 Global Accounts shows a steady picture in the sector overall with substantial ongoing investment in new and existing properties. This is despite the increase in debt being lower than that reported in 2015.

“A marked increase in turnover from commercial activities is an indicator of how providers are maintaining development levels in a more uncertain operating environment. “

MacGregor also said that the HCA would remain vigilant as home providers continue to adapt, as they expect their risk management and mitigation approaches to keep pace with their activities.

“Following on from the unit cost analysis and data we shared in June 2016, we are committed to presenting the data on costs in a clear, comprehensive and comparable format for greater transparency,” she added.

“We recognise that no single cost metric can perfectly capture diversity in business models and reporting approaches, and that providers’ costs can be driven by a range of factors.”

Despite its positive findings, the report follows news last month from the National Audit Office that social housing was failing to keep pace with need as rents had been growing faster than earnings for over 15 years.

The government has also announced plans to reform the “broken” housing system by increasing diversity and facilitating housebuilding in an effort to make home owning accessible for young people.

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