Financial Stability In The Social Housing Sector Continues

The social housing sector remains in a strong financial position with access to sufficient finance, according to the latest quarterly survey published by the Homes and Communities Agency. The survey shows registered providers’ financial position on the 31 December 2015 and includes forecasts up to 31 December 2016. The quarterly survey is one of the ways in which the regulator monitors and reports on the financial health of the sector. The 2015/16 Q3 survey (October to December) reports that the sector has access to sufficient finance, with £14.0 billion in undrawn facilities and £5.6 billion held in cash, and with 97% of providers having sufficient debt facilities to last for more than 12 months. Read more on the GovUK website.

Carney Promises Action On Buy-To-Let Property Market

The Bank of England has again expressed concern about the UK's buy-to-let property market. The Bank's governor, Mark Carney, said he was concerned about high levels of lending to landlords and that the Bank would take action. "There are a number of things happening ... we are watching it closely and we will take action," he said. Mr Carney said the problem was that investors might sell their properties at the same time if house prices fell. In September, the Bank's Financial Policy Committee (FPC) made a similar warning about the buy-to-let market. The committee, which is led by Mr Carney, said the growing market posed a threat to the UK's financial stability. Read more on the BBC website.

Ministers Urged To Examine New Buy-To-Let Boom In UK Care Homes

Private investors are being enticed to purchase rooms in UK care homes on a buy-to-let basis with the promise of large profits and rental income. The Bureau of Investigative Journalism has found hundreds of rooms being offered for sale for as much as £85,000 each. They offer “guaranteed” rental income of around 10% annually and a total return on investment of up to 188% over 10 years. Such buy-to-let room schemes are not regulated by the Financial Conduct Authority, while the Care Quality Commission, which oversees standards in care homes, says it does not have responsibility for providers’ financial sustainability. Servicing such high fixed returns could squeeze funds available for providing the actual care. Residents could also have to move if the care homes failed to pay their debts to investors and were forced to close. Read more on the BIJ website.

Social Housing Sector In Rude Financial Health

The social housing sector is in rude health, according to the HCA, with access to enough finance to ensure it remains in a strong financial position. That’s the verdict of the latest quarterly regulatory survey, based on the first data return that providers have submitted since the July Budget. Although it remains important that providers continue to manage risks to their businesses, the HCA said the survey shows the sector remaining attractive to lenders, with funding available to registered providers to cover their development and operating costs. Read more on the HCA website.

Buy-To-Let Boom Could Jeopardise Financial Stability

The buy-to-let boom could pose a risk to financial stability, the Bank of England said as it prepared to embark on a review of the potential pitfalls of the housing market. The Bank is assessing buy-to-let as part of its analysis and remains concerned about the level of household debt. Threadneedle Street said lenders were loosening the criteria for granting buy-to-let mortgages and making more deals available to borrowers with less than 25% deposits. This part of the mortgage market has been responsible for most of the growth in lending since 2008, increasing by 8% in the year to the first quarter of 2015. Looser lending requirements could bolster house prices but also exacerbate falls if borrowers needed to sell during times of distress. Read more on the Guardian website.

Financial Stability in the Social Housing Sector Continues

The social housing sector continues to demonstrate its financial stability, and has access to sufficient finance, according to the latest quarterly survey (2014/15 Quarter 1) published by the Homes and Communities Agency. Overall the sector is in a strong position in relation to its future financing needs with £13bn of undrawn borrowing facilities and £4bn held in cash. As the regulator of social housing providers, the HCA undertakes a quarterly survey of housing providers to establish the levels of exposure to a range of risks faced by the sector. This report is based on a survey of all private registered providers owning and/or managing more than 1,000 homes for the quarter ending 30 June 2014. Read more on the HCA website.