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Housing associations’ development and repairs spending up by half in late 2020
Housing associations’ spending on repairs and maintenance surged by 50% in the last three months of 2020, while investment in development also rose by nearly half.
The Regulator of Social Housing’s (RSH) quarterly survey for October to December 2020, published today, revealed that providers in England spent £455m on capitalised repairs and maintenance over the period – close to pre-pandemic levels.
Despite being a 50% increase on the £299m spent in the previous quarter, the figure was 24% lower than forecast, with the sector reporting ongoing delays because of lockdown restrictions.
Spending on new housing supply in the quarter was £3.4bn – up 42% on the previous three months and higher than the £3.1bn forecast for contractually committed schemes.
Both development and repairs work had been forced to stop earlier in the year as a result of the coronavirus pandemic.
Sales also rebounded, with receipts totalling £1.7bn – outstripping cautious September forecasts made by housing associations by 17% and generating £400m in surpluses.
The number of unsold affordable homeownership new builds on landlords’ books fell by 25% to 2,994 over the quarter, having previously been at the highest level since the data was first recorded in 2009.
Market sales across the sector totalled 1,663 – the highest number since records began in 2014 – while market sale completions rose nearly 50% to 1,495.
Unsold affordable homes still outnumber pre-coronavirus levels, while market sale completions are lower.
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Losses from rent arrears and voids “remain stable”, the RSH said, although are still affected by the economic impacts of the COVID-19 pandemic.
Rent collection rates are matching normal seasonal trends, the English regulator added, with the sector having “strong” underlying cashflow performance.
Private finance deals worth £3bn were agreed by the sector during the quarter, bringing the total to £113bn.
Total cash and undrawn facilities stood at £35.5bn at the end of 2020, representing “access to sufficient finance”, according to the RSH.
Housing associations’ financial forecasts indicate they expect performance and plans to return to normal levels over the next 12 months, but the RSH warned this could be impacted if the government’s roadmap out of the pandemic is delayed.
Will Perry, director of strategy at the RSH, said: “The social housing sector continues to show financial strength and forecasts increased spend on maintenance and investment over the next 12 months.
“The continuing challenges caused by the coronavirus pandemic reinforce the need for providers to manage risk effectively and ensure they can both maintain services to tenants and plan and invest for the future.”
The quarterly survey is intended to provide a financial health check on England’s housing association sector.
This latest survey is based on information provided by 214 landlords, all owning or managing more than 1,000 homes.
