Branch Secretary :

‘Record profits’ for housing associations

New Moody’s report


UK Housing Associations once again made record profits according to a new report from Moody’s published on Monday. Associations increased their turnover by 6% compared to the previous year according to the credit rating agency report.


Cost reductions across core business


Social housing remains the most profitable and least risky area of operation for housing associations despite the government imposed 1% rent reduction (due to end in 2020).  “The increase in profitability in 2017 was driven primarily by cost reductions across the core social housing letting business, including cutbacks on maintenance costs and major repairs” according to Matt Fawcett, the reports co author.


Hurting tenants and staff


As we have recently reported housing association surpluses are up 15.6% to a record £5.6 billion in 2016/17 while employment costs are down by 6.6%, falling to £3.37 billion.  This is hurting tenants, whose repairs are cut and staff who report unrealistic workloads and a squeeze on terms and conditions.  


Post Grenfell


Alison Inman of the Chartered Institute of Housing recently added her voice to the view that, post Grenfell, emphasis had to shift to the maintenance of existing assets but all the figures suggest a move in the opposite direction in the sector.


Debt funded growth


The report highlights the accelerating diversification of housing associations with social housing now reduced to 67%, and in many associations it will be considerably lower. Diversification into market sales activity has accelerated dramatically in the last five years, doubling as a proportion of revenue to 18% of turnover in 2017 and Moody’s expect this trend to continue.  Moody’s explain “The sector's growth continues to be funded by debt, topped up by operating cash flow and government grants. Aggregate debt rose by 13% between 2016 and 2017, compared to a compound annual growth rate (CAGR) of 8% over the last five years.”


Paul Kershaw, Chair Unite Housing Workers LE1111 (27th February 2018)


The report, "UK Housing Associations 2017 Results: Operating performance improves despite rent cut", is now available on



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