Lender Concerns Prompt Housing Bill Change

Ministers are set to change the Housing and Planning Bill following concerns that a new system of managing sector insolvencies would lead to lenders asking social landlords for more security. Within weeks, the government is expected to table amendments to the proposed legislation, which is currently going through the House of Lords. The Bill as it stands would potentially damage lenders’ ability to realise the full value of their security on some loans. The bill allows the communities secretary to appoint an administrator when a housing association collapses. The problem arose because under the current drafting of the bill, the primary aim of the proposed new special administration regime is to ensure social housing assets remain in the social rented sector. Read more on Inside Housing.

Osborne Reveals Record Sale Of Public Housing Debt To Private Investors

George Osborne has announced the sale of £13bn of mortgage debt to private investors, in what is said to be the largest ever sale of financial assets by any European government. In a separate development, the Financial Times has reported that Osborne is considering selling off around £44bn of historic housing association debt. This inevitably prompted a flurry of alarm across the housing industry, with many calling it the privatisation of social housing assets. The Treasury announced that the Chancellor has authorised the sale of the mortgages, which were acquired by the Government during the financial crisis from Northern Rock, the mortgage assets are being sold to capital management firm, Cerberus.  According to the Treasury, the mortgage portfolio is being sold for £280 million more than their “book value”. Read more on the Housing Excellence website.

Buy-To-Let Landlords Earn Returns Of Up To 1,400% Since 1996

Buy-to-let landlords have hit the investment jackpot by earning returns of almost 1,400% since 1996, leaving the performance of shares, bonds and cash trailing in the wake of Britain’s property boom. On average, £1,000 invested in a buy-to-let asset in the final quarter of 1996 was worth £14,987 by the end of last year, according to analysis by economists at the Wriglesworth Consultancy for lender Landbay. This was more than four times than the equivalent investment in commercial property, UK government bonds or shares and seven times the return on cash. Years of rising house prices mean that despite the slump after the financial crisis, property investors who bought 18 years ago are still sitting on large capital gains. Read more on the Guardian website.

Regulator Drops Ring-Fencing Plans

The social housing regulator has dropped controversial plans to make landlords ring-fence their social housing assets.  Julian Ashby, chair of the HCA, has confirmed the change of approach.  A HCA discussion paper published in April suggested ring-fencing measures to protect social assets from riskier activities. These included limits on non-social activity as a percentage of turnover and restrictions on using social housing assets as loan security.  However, following widespread concern from landlords, the regulator has now ditched the plans for all non-profit associations which have parent companies registered with the HCA. Landlords had warned the plans would restrict their ability to carry out mixed-tenure developments and community projects. Read more on Inside Housing.