The Regulator of Social Housing (RSH) has revealed rent collection in the social housing sector has fallen to its lowest level since 2013.
The latest quarterly survey from the RSH, covering the period from 1 April 2020 to 30 June 2020, showed rent collection sunk to a seven-year low, despite the overall figure remaining strong at over 97%.
The report attributed the fall to a sustained lockdown period of lockdown and the associated increase in unemployment – the overall impact being an increase in arrears and void rents.
At the same time, mean provider void losses have increased to 2.2%.
Offsetting reductions in income, providers’ expenditure on capitalised repairs and maintenance was just over half that incurred during the same period in 2019 – partly due to the full lockdown imposed in March.
Meanwhile, the short-term closure of the housing market saw sales receipts at about 10% lower than providers’ March forecasts, some of which had not been updated to reflect the full effect of the COVID-19 pandemic.
Investment in housing supply was £1.8bn in the quarter to June 2020, lower than the total March forecast, but higher than the forecast on contractually committed schemes.
Still financially strong
Despite the economic uncertainty and disruption caused by COVID-19, the RSH report shows that the social housing sector is in a strong financial position overall.
The sector has good access to finance, with £107.1bn of debt facilities in place at the end of June, of which £24.8bn remained undrawn.
Available cash balances rose to £6.4bn, and a total of £4.5bn in new finance was agreed in the quarter – including £1.3bn from the Bank of England’s Covid Corporate Financing Facility, in which eight providers participated.
Forecasts for the next 12 months show that the sector expects to increase its development and housing market exposure, though not to pre-lockdown levels.
Providers also expect to increase their investment in existing stock, with evidence of plans to reschedule delayed capital expenditure from the first quarter of the financial year.
Commenting on the RSH report, Will Perry, director of Strategy at RSH, said: “The results of the quarterly survey show that the social housing sector continues to maintain a good financial position in the face of considerable challenges.
“The next few months may mean further uncertainty due to the continued impacts of the pandemic, and we expect providers to be ready to respond promptly to the changing environment, alongside maintaining services and investment, and planning for the long term.”
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