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RPs agree record £15bn of new finance, but regulator warns of rising risk around refinancing

By 28/05/2021No Comments

Registered providers in England agreed a record £15bn of new finance in the past financial year amid the pandemic, with total debt facilities in the sector hitting £113bn, new figures reveal.

Picture: Getty

Picture: Getty


RPs agree record amount of new finance, but regulator warns of rising risk around refinancing #UKHousing #SocialHousingFinance

The Regulator of Social Housing (RSH) reported that new finance agreed in the year to the end of March 2021 was up 45 per cent on the previous year’s figure of £10.4bn.

In its latest quarterly survey, the regulator said the finance agreed was sufficient to fund the sector’s interest cost, loan repayments and capital commitments for “over 12 months”.

However, the sector’s “immediate refinancing risk has increased” as 4.5 per cent of loans are due for repayment within 12 months, the regulator said. This figures compares with 1.9 per cent in the prior year.

Despite this and the pressures of the coronavirus pandemic, the sector remained financially healthy, the RSH said.

The survey also revealed that more than half of the £113bn debt facilities – a total of £61.6bn – were bank loans. Of the total facilities, £85.2bn was reported as being drawn. A total of £101.3bn of the debt was secured.

Of the £113bn debt facilities, more than half (55 per cent) were bank loans.

In the last three months of the year, £3.1bn of finance was agreed. This included £1.2bn from capital markets and £1.9bn from banks. Five providers alone arranged £100m or more of bank loans, the survey showed.

Spending on repairs and maintenance in the three months to the end of March rose 27 per cent to £580m, as levels began to return to pre-pandemic levels after lockdown restrictions were lifted.

The survey, based on data returns from 215 registered providers, also showed that sales of affordable and market sale homes reached a record high in the year. A total of 15,006 affordable homes were sold, while 5,316 market sale properties were offloaded.

It resulted in the record sales receipts in the year of £5.9bn. In the final quarter, sales receipts also hit an all-time high of £1.9bn.

Investment in housing development fell 18 per cent during the most recent quarter to £2.8bn. The regulator said: “Providers have reported general scheme delays and a slowdown in works attributable to the latest lockdown and enhanced safety measures on sites.”

On rent arrears, the mean figure across providers reduced to 3.4 per cent at the end of March, compared with 3.8 per cent in the previous quarter. However, in London, the mean average in the quarter was 5.2 per cent.

Median void losses fell slightly to 1.5 per cent in March 2021, compared with the 1.6 per cent reported since the start of the pandemic.

Will Perry, director of strategy at the RSH, said: “The social housing sector remains financially strong and continues to weather the challenges caused by the coronavirus pandemic, forecasting increasing spend on maintenance and investment in new and existing homes.”

Looking ahead, he added: “Providers face a range of increasing pressures, particularly on capital expenditure.

“They will need to maintain strong risk management and financial control and communicate effectively with investors so that they can continue to meet the needs of current and future tenants.”

In documents released with the survey, the regulator added: “Forecasts will need to be closely monitored and updated as the economy reopens, and flexibility will need to be included to allow any increasing risks to be effectively managed.”


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