£174 million of assets written off from Housing Associations

                                                                                         

Housing associations have had £174million written off their assets in 2008/9 as land and house prices tumbled.

During the year, 92 housing associations reported the impairment charges, driving the figure up 40% on last year. But the Tenant Services Authority (TSA), which regulates housing associations, said the figure represented less than 0.5% of the associations' total assets. It added that none of the associations had reported financial difficulties or were in breach of covenants in their loan agreements with lenders because of the charges.

Elsewhere in the TSA's latest quarterly annual survey, it reports that the number of unsold homes had continued to fall, down 7% to 8,713 homes. Housing associations also converted fewer unsold low-cost home ownership (LCHO) homes into rented accommodation, down from 2,200 to 344. The sector is planning asset sales including shared ownership units and right-to-buy properties of £1.4 billion over the next 12 months, up from £1.1 billion last quarter Housing Associations have £4.7 billion of the £5 billion debt needed over the next 12 months already in place having agreed £7.1 billion of new loan facilities between April 2008-March 2009.

Clare Miller, Executive Director Risk and Assurance, said: “Although the sector continues to cope with the fall out from the housing market slowdown, the economic situation remains finely balanced. While we have figures showing impairment charges estimated at £174 million, housing associations are demonstrating that they have the financial capacity to survive the downturn without adversely impacting on delivering services to tenants. Their actions in managing their businesses have enabled them to withstand the turbulence in the financial markets. “In comparison to some of the commercial builders who have written down losses by up to 35% of their value, housing associations continue to demonstrate resilience. They are still selling homes, securing new investment to deliver affordable housing and remaining financial stable.”

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