Branch Secretary :

Housing Associations to become more profitable again next year

English housing associations are set to continue their path of increasing profitability according to Moody’s – the credit rating agency in a report issued this week.


The sector has repeatedly booked record surpluses in recent years, and Moody’s expect that to continue.  Unite reps will want to draw this the attention of Unite members considering pay claims.  While executive pay in the sector has been rising ahead of inflation, real pay has been squeezed for the bulk of staff.


According to the report, England’s housing associations will see their sales turnover increase in 2015 while their gearing will remain broadly stable.


The report – ‘2015 Outlook -- English Housing Associations’ – predicts that the value of housing assets will increase, owing to continued investment in existing and new social housing assets and claims that growth of housing assets will remain a priority for the sector.


Debt levels will continue to rise in 2015, but higher reserves will offset these increases, while the liquidity of rated HAs is and will stay strong, with more than half of the portfolio reporting sufficient cash and immediately available facilities to cover projected cash needs for at least two years.


The sector’s operating margins rose to 29% in 2014 from 22% in 2010. Operating margins will dip in 2015 but will recover to levels near 30% by 2016.


Jeanne Harrison, a Moody's analyst, was quoted by 24 as saying that: "Operating margins continue to improve in the sector as a result of increasingly profitable social housing lettings, management focus on efficiency, and a favourable macroeconomic climate.”


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