The 2016 Global Accounts of private registered providers, published today (17 February 2017) by the Homes and Communities Agency, shows that the social housing sector has had a solid year of investment underpinned by strong in-year financial performance.
The Global Accounts gives an annual overview of the financial status of the social housing sector and is 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.
For the first time, we have set out group as well as entity level data providing a clearer view of activity, such as open market sales, which typically takes place in unregistered subsidiaries.
With this year’s publication, we are also including an analysis of unit costs at group and entity level, which gives the headline costs per social housing unit, broken down into components, drawn directly from the Global Accounts. This is supported by contextual information such as supported housing, stock transfer age and regional wages, which can be contributory factors in driving cost differences. These are drawn mainly from other regulatory returns, including the Statistical Data Return.
Some of the main findings for 2016 are:
over £7.5bn was invested in new and existing stock as the sector continued to leverage the surpluses generated on its trading activity
the development of new properties for both shared ownership and outright sale increased markedly in 2016 – a 39% increase in total turnover from this activity on the previous year
group turnover increased in the year by 8% – despite increases in sale and other non-social housing activity, three quarters of total turnover continues to come from social housing lettings
debt increased by £2.2bn in the year to fund capital expenditure
improved operating margins and stable costs of debt contributed to an increase in interest cover – while increasing property values contributed to gearing remaining stable.
Fiona MacGregor, Director of Regulation 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. We will remain vigilant as providers continue to adapt, and 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. 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. The information will help providers and boards to better understand their own costs and to robustly challenge themselves on their economy, efficiency and effectiveness of expenditure.
The 2016 Global Accounts and Unit Cost Data are available on the HCA website.
The annual Global Accounts from 2012 to 2015 are also available on the website.
The Homes and Communities Agency is the single, national housing and regeneration delivery agency for England, and is the regulator of social housing providers.
As regulator, its purpose is to promote a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs. It will do this by undertaking robust economic regulation, as enshrined in legislation, focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer.
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