According to an article on 24dash.com, housing associations have done well in spite of difficult housing and credit market conditions, as well as the Tenant Services Authority (TSA) report that 92 housing associations have experienced impairment charges totalling ?174 million for 2008/09 due to the drop in value of their homes and land.
However, the revised impairment figure ? which is up by nearly 40 per cent on the previous quarter?s estimate ? actually represents less than 0.5 per cent of the associations? total assets. Other positive news is that there has been no report from the association of financial difficulties or breaching the covenants in their loan agreements. It seems the good news outweighs the bad.
The TSA?s latest quarterly survey (April-June 2009) has indicated that the property market is stabilising, with the number of unsold homes dropping by 7 per cent to 8,173 homes. The housing associations have also been successful in reducing their unsold low-cost home ownership (LCHO) homes from 2,200 to 344. This means the associations are lumbered with fewer LCHO homes.
Clare Miller, executive director of 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 per cent 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.?
