RSH quarterly survey results published for Q2 June to September 2021

The Regulator of Social Housing has today (25 November 2021) published the results of its latest quarterly survey of registered providers’ financial health.

The report covers the period from 1 July to 30 September 2021. The social housing sector continues to recover from the pandemic with strong liquidity and robust interest cover and income collection indicators.

The sector’s total agreed borrowing facilities increased by £1.8 billion, to reach £115.3 billion at the end of September. New finance of £2.9 billion was agreed in the quarter with 71% of this from capital markets. There was further refinancing activity in the quarter due to the expiry of the Covid Corporate Financing Facilities.

Providers continue to invest capital in new and existing homes, although current uncertainties make accurate forecasting difficult. £2.9 billion was invested in the acquisition and development of new homes between July and September 2021; 7% less than in the previous quarter, and 32% below the forecast for this quarter. Capitalised major repairs spend increased to £479 million, but again less than previously forecasts for the quarter. The difference from forecasts was due to the impact of supply chain issues over the quarter.

As a result of seeking to make up these shortfalls, forecast capital expenditure for the twelve months ahead is at a record high with both development spend (at £18.3 billion) and capitalised major repairs spend (at £3.1 billion) predicted to be over 50% higher than in the previous twelve months. However, given the current challenges being experienced with delays relating to labour and material shortages, we expect some variation from forecasts: this is an area RSH will continue to monitor.

The number of unsold properties reduced in the quarter. At £531 million, Affordable Home Ownership first tranche sales are the highest value ever recorded and the unit sales are higher than pre-pandemic levels, with a fall of 11% in the number of units unsold in 6 months. There was also a 24% fall in the number of market sale units unsold for more than six months.

Will Perry, Director of Strategy at RSH, said:

While the social housing sector continues to recover from the coronavirus pandemic, current economic conditions continue to provide challenges for providers in the form of labour and material shortages. Providers will need to closely monitor these and wider pressures to ensure they are able to manage the range of risks their organisation is facing.

The quarterly surveys are available on the  RSH website.

Notes

The quarterly survey provides a regular source of information regarding the financial health of private registered providers, in particular with regard to their liquidity position.

The quarterly survey returns summarised in the report cover the period from 1 July 2021 to 30 September 2021 and the latest report is based on regulatory returns from 209 PRPs and PRP groups who own or manage more than 1,000 homes. The survey Data about income collection, including rent collection, was first collected in 2013.

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