On Tuesday 17 December, the Regulator of Social Housing (RSH) published its Global Accounts analysis for 2019. This presents a sector-wide view on key financial measures for English housing associations managing more than 1,000 properties.
We have gone beneath the high-level results to bring you data-driven insights. Our analysis gives you the opportunity to compare the sector-wide view to your own experiences.
Our key findings are:
Reduction in operating margins hitting hardest in high value and low rent regions
The pressure on operating margins is happening across the sector in England with an overall drop of 3 percentage points – housing associations in London and the South East along with Yorkshire and the North East recording the largest reductions. The fall in operating margins for associations based across central England and the South West was much smaller.
In Scotland, operating margins only reduced by 0.3 percentage points from 2018, while in Northern Ireland operating margins rose over the same period by 0.6 percentage points. While associations in both countries tend to record smaller surpluses, the results show the effect that regulatory and operating conditions have on housing association finances.
Mega-merger associations make smaller profits
Associations managing more than 30,000 units recorded a 3.6 percentage point reduction in operating margins compared to those in the 10,000 to 30,000 units band, where the reduction was only 1.4 percentage points.
Managing and maintaining stock in London adds £1,400 to the cost per unit
London-based housing associations recorded average social housing lettings cost of £5,200 per unit, over £1,400 higher than neighbours in the South East (£3,726) and East of England (£3,464).
Smaller housing associations have higher costs
The average social housing lettings cost per unit for housing associations managing fewer than 5,000 units recorded was over £1,000 more than the sector-wide average. The lowest costs were recorded by landlords in the 10,000 to 30,000 units band – which also had the smallest reduction in operating margins.
Housing associations in Eastern England invest the most in new build
Housing associations in Eastern England invested funds for new properties equating to 6.7% of their asset base in 2019. This compares to the English sector-wide figure of 4.5%. Landlords based in the North East recorded the lowest investment in new properties, but the highest investment on works to existing stock.
Signs of a north / south divide in development rates in England
Landlords based in the Midlands, South and London all recorded average rates of new supply above 2% of units managed, while those based in the North recorded rates below 1.5% - with the North West and North East recording average rates of 0.9% of units managed.
The value of grant funding for housing associations
While Scotland’s net additions to supply are comparable to England, Northern Ireland’s housing associations delivered new supply equivalent to 5% of stock managed in 2019. The regulatory environment in Northern Ireland places much higher emphasis on grant funding.
The proportion of English housing associations’ housing properties (net book value) funded by grants was around 20%. In Northern Ireland, where new supply delivery is much higher, the equivalent ratio is 60%. This shows what can be achieved when public money is invested in housing infrastructure.
By the end of January, our members will have access to Global Accounts data alongside Scottish annual financial statements within our online reporting tool. This means you can compare calculated outputs and create charts displaying your results against your chosen peer group, without needing to create lookups and tables behind-the-scenes. You can also compare your Global Accounts data alongside performance, satisfaction and benchmarking costs, to provide a truly holistic view of your organisation in 2019.
Our online reporting tool is only available to HouseMark members, accessed through our website.
HouseMark is the leading data-driven solutions provider to the housing sector. We analyse financial and operational data to help you prioritise action and maximise the impact of investment. Email firstname.lastname@example.org to find out more about how we can deliver data-driven insights, answers and solutions to drive performance improvements in your organisation.
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