Special report: pre-tax surplus drops 11% among British associations

Insight09 Aug 2019Chloe Stothart and Robyn Wilson

Social Housing’s analysis of the sector’s global accounts finds that housing associations’ pre-tax surplus fell last year – driven by drops in England, Scotland and Wales.

Sharelines

Britain's largest housing associations saw a 10.8% drop in their pre-tax surplus with drops in England, Scotland and Wales #ukhousing #socialhousingfinance

Social housing cost per unit increases from £3,290 to £3,400 due to increased maintenance and management spend #ukhousing #socialhousingfinance

HAs' pre-tax surpluses drop but there are rises in turnover, operating costs and reserves - our latest special report analyses the global accounts across England, Scotland and Wales #ukhousing #socialhousingfinance

Britain’s largest housing associations (HAs) saw a significant decrease in their pre-tax surplus during the 2018 financial year. Social Housing has analysed the sector’s 2017/18 global accounts, which are published by the regulators in England, Scotland and Wales.

Our analysis has shown that total surplus for the year before tax was down 10.8 per cent to £3.96bn. This figure was driven by drops in pre-tax surplus across all three countries.

Housing associations drive up pre-tax surplus by 21%

Scottish housing associations see 27% fall in pre-tax surplus

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The most significant of these drops was seen in Scotland, which decreased 26.7 per cent to £184m. Wales saw a 12.2 per cent pre-tax surplus decrease to £79m.

This overall drop was in stark contrast to last year, when total pre-tax surplus was up nearly 21 per cent to £4.4bn. Turnover, meanwhile, was up 2.5 per cent to £23bn for 2017/18, while operating costs rose 4.2 per cent to £14.7bn. There were increases in HAs’ total finance and capital reserves, which were up 9.6 per cent to £53.8bn.

The analysis also shows a fall in social housing units in England and Britain, which stemmed from a change in the Regulator of Social Housing’s (RSH) methodology which excluded social leasehold units and included units owned and/or managed rather than just those in management.

The change meant the 2017 units figure reduced by 80 to 2,681. The tables contain the original figures, but the restated number is footnoted.

The new methodology meant stock in Britain rose one per cent to 3,168. However if the change was applied in 2018 but not in 2017, the figure would have dropped 1.4 per cent to 3.17 million.

England, Scotland and Wales housing association global accounts 2017/18 summary

	Total GB	Change on year	England	Change on year	Scotland	Change on year	Wales	Change on year
Social housing (number of units, ’000s)	3,168	-1.4%	2,712	-1.8%	294	+1.5%	162	+0.6%
Comprehensive income	£m		£m		£m		£m
Turnover	23,028	+2.5%	20,459	+2.3%	1,616	+3.6%	953	+5.0%
Operating costs	(14,667)	+4.2%	(12,610)	+4.2%	(1,296)	+2.7%	(761)	+6.4%
of which depreciation	(2,630)	+4.7%	(2,200)	+4.8%	(308)	+3.7%	(122)	+7.0%
Operating surplus	6,156	-5.3%	5,644	-4.3%	320	-21.8%	192	-0.5%
Surplus on sales of assets	956	+18.6%	932	+19.0%	10	-28.6%	14	+55.6%
Interest payable and similar charges	(3,466)	-8.5%	(3,175)	-9.3%	(169)	+1.2%	(122)	+1.7%
Surplus for the year before tax	3,963	-10.8%	3,700	-9.8%	184	-26.7%	79	-12.2%

Financial position
Net book value	163,382	+4.1%	145,022	+4.0%	11,970	+5.7%	6,390	+5.1%
Long-term loans	76,782	+3.7%	70,200	+3.8%	3,926	+2.9%	2,656	+2.4%
Capital grant	43,918	+3.2%	35,700	+2.3%	5,199	+8.1%	3,019	+5.6%
Total finance and capital reserves	53,823	+9.6%	49,500	+9.5%	3,166	+11.0%	1,157	+8.4%

Notes: 1) Some items of income and expenditure are not identified separately in the above table. These include exceptional items, Gift Aid, interest receivable, cost of sales, pensions, movements in fair value of financial instruments and ‘other’ items. However these items are included in the calculation of the surpluses. 2) England represented by registered providers with more than 1,000 units; Wales represented by 33 largest housing associations.

Source: Global accounts 2017/18, published by regulatory agencies in England, Scotland and Wales

England

This is the first time in five years that the number of social housing units has decreased, with figures steadily rising before this.

Turnover from social housing lettings was up two per cent at £15.4bn, while operating costs for the units increased slightly to £10.3bn from £10bn the year before.

Overall, turnover was up 2.3 per cent for English HAs to £20.5bn, after two years of remaining flat at £20bn over 2015/16 and 2016/17.

The RSH report said operating margin decreased slightly to 28 per cent due to increases in costs. Operating surplus from the sector’s core activity of social housing lettings was down by two per cent to £5bn.

Surplus from fixed asset sales: England

Despite the decrease, the RSH said: “In aggregate, the sector’s financial performance was strong. Of the 230 provider groups included in the global accounts, 211 have interest cover on a social housing lettings basis of greater than 100 per cent.”

Social Housing’s analysis showed that total operating surplus was down more than four per cent to £5.6bn. Again, this was the first time in five years that operating surplus has decreased year on year. Pre-tax surplus was down 9.8 per cent to £3.7bn.

In describing the general operating environment for HAs, the RSH noted the uncertainty caused by Brexit and said providers should be prepared for “adverse economic conditions”.

Turnover, operating costs and number of units: England

Elsewhere, in the regulator’s Value for Money Standard, which HAs must now publish in their annual accounts, the RSH said there had been some inconsistencies in providers’ reporting.

Brought in during 2018, the rule means that providers now have to report on a suite of defined performance metrics to measure economy, efficiency and effectiveness on a comparable basis across the sector. The RSH will use the provider metrics to support its regulation of the sector.

One of the findings showed that there has been an increase in headline social housing cost per unit across all quartiles, with the median rising from £3,290 per unit in 2017 to £3,400 in 2018. This was due to increases in both management and maintenance expenditure.

England global accounts 2017/18: eight-year summary

	Total 17/18	Change on year	Total 16/17	Total 15/16	Total 14/15	Total 13/14	Total 12/13	Total 11/12	Total 10/11
Social housing units (’000s)	2,712	-1.8%	2,761†	2,734	2,640	2,624	2,613	2,551	2,527
Comprehensive income	£m		£m	£m	£m	£m	£m	£m	£m
Turnover	20,459	+2.3%	20,000	20,000	18,600	15,634	14,860	13,751	12,647
Operating costs	(12,610)	+4.2%	(12,100)	(12,500)	(11,900)	(10,606)	(10,147)	(9,846)	(9,569)
of which*:
depreciation*	(2,200)	+4.8%	(2,100)	(2,000)	(1,900)	(1,452)	(1,347)	(1,235)	(652)
impairment*	(0)	n/a	(0)	(100)	(0)	(34)	(50)	(16)	(1)
management costs*	(2,800)	+7.7%	(2,600)	(2,800)	(2,700)	(2,612)	(2,488)	(2,317)	(2,206)
service costs	(1,600)	+6.7%	(1,500)	(1,500)	(1,400)	(1,365)	(1,302)	(1,175)
maintenance*	(2,700)	0.0%	(2,700)	(2,700)	(2,700)	(2,678)	(2,593)	(2,497)	(2,551)
major repairs*	(500)	0.0%	(500)	(500)	(600)	(576)	(572)	(593)	(1,011)

Cost of sales	(2,205)	+16.1%	(1,900)	(1,900)	(1,600)	(848)	(852)	(672)	(491)
Operating surplus	5,644	-4.3%	5,900	5,500	5,100	4,139	3,849	3,220	2,704
Surplus on sales of assets	932	+19.0%	783	700	600	630	466	516	321
Interest receivable	104	+4.0%	100	100	100	217	182	171	135
Interest payable	(3,175)	-9.3%	(3,500)	(3,000)	(3,000)	(2,638)	(2,522)	(2,355)	(2,094)
Movement in fair value of financial instruments	(15)	-66.7%	27	(55)	n/a	n/a	n/a	n/a	n/a
Movement in valuation of housing properties	(5)		(8)	(100)	(0)	n/a	n/a	n/a	n/a
Surplus before tax	3,700	-9.8%	4,100	3,400	2,600	2,362	1,946	1,775	1,117
Unrealised surplus/deficit on revaluation of housing properties	0	n/a	0	(400)	100	n/a	n/a	n/a	n/a
Actuarial loss/gain on pension schemes	323	-35.4%	(500)	400	(600)	n/a	n/a	n/a	n/a
Change in fair value of hedged instruments	374		100	0	(900)	n/a	n/a	n/a	n/a
Comprehensive income for the period	4,411	+19.2%	3,700	3,400	1,100	n/a	n/a	n/a	n/a

Financial position
Housing at cost	142,356	+3.6%	137,475	101,800	n/a	106,851	105,090	98,075	84,750
Housing at valuation	2,666	+30.2%	2,047	2,500	n/a	24,105	20,886	20,488	24,672
Housing at deemed cost	n/a		n/a	40,900	n/a	n/a	n/a	n/a	n/a
Gross book value	164,100	+4.8%	156,600	148,600	na	130,956	125,976	118,563	109,423

Social Housing Grant			n/a	n/a	n/a	(41,984)	(43,059)	(41,616)	(41,118)
Other capital grants			n/a	n/a	n/a	(2,367)	(2,348)	(2,214)	(2,072)
Depreciation and impairment**	(19,100)	+10.4%	(17,300)	(15,600)	*	(8,427)	(7,781)	(6,783)	(3,549)
Net book value	145,022	+4.0%	139,300	134,800	131,100	78,179	72,788	67,950	62,684
Total fixed assets	155,400	+5.0%	148,000	143,200	139,000	81,958	76,357	71,150	65,404

Current assets	16,300	+4.5%	15,597	14,300	13,200	11,063	10,184.0	9,119.0	8,913.0
Current liabilities	(7,600)	+10.1%	(6,900)	(6,800)	(5,900)	(5,037)	(6,488)	(6,388)	(6,291)
– deferred capital grant	400	0.0%	400	(300)	(300)	n/a	n/a	n/a	n/a
Pension liability	(73)		n/a	n/a	n/a	(724)	(963)	(688)	(438)
Total assets less current liabilities	164,100	+4.2%	157,500	150,700	146,300	87,261	79,090	73,193	67,587
Long-term loans	70,200	+3.8%	67,600	64,400	63,300	50,707	51,215	47,869	44,373
Group undertakings	0		0	0	0	6,119	–	–	–
Finance lease obligations	600	+50.0%	400	400	300	130	–	–	–
Deferred capital grant	35,700	+2.3%	34,900	35,100	35,300	n/a	n/a	n/a	n/a
Other creditors and provisions	8,200	-11.8%	9,300	8,900	9,000	2,867	4,556	4,665	4,857
– of which pension provision	1,900	-13.6%	2,200	1,900	2,200	n/a	n/a	n/a	n/a
Reserves	49,500	+9.5%	45,200	41,800	38,500	27,436	23,319	20,658	18,358

Growth and debt-servicing ratios
Growth in turnover	2%		0	+7.5%	na	+5.2%	+8.1%	+8.7%	+3.0%
Operating margin	28%	-6.7%	30	27.6%	27.4%	26.5%	25.9%	23.4%	21.4%
Net margin	18%	-10.0%	20	16.7%	13.8%	15.1%	13.1%	12.9%	8.8%
Debt servicing ability
Debt per unit	26,738	+3.4%	25,871	£24,397	£23,951	£22,474	£21,313	£20,400	£17,828
Effective interest rate	4.8%		5.3%	4.9%	5.0%	4.7%	4.8%	4.8%	5.0%
EBITDA MRI interest cover	174		170	170.0%	153.0%	153.7%	138.0%	115.7%	106.4%
Gearing	50		50	49.5%	49.2%	96.2%	92.9%	92.2%	86.1%
Operating ratios
Management cost per unit	£1,015.66		940	£1,080	£1,010	£996	£952	£908	£873
Maintenance cost per unit	£1,027.91		990	£1,010	£1,030	£1,021	£992	£979	£1,009

Note: Global accounts represent housing association RPs larger than 1,000 units. Figures before 2014/15 calculated under FRS 102, figures from 2014/15 onwards under UK GAAP. Some FRS 102 and UK GAAP (including gearing) are not comparable. n/a = not applicable under relevant accounting standard, n/s = not stated. †2016/17 number was restated to 2,681 following a change in methodology * = no FRS 102 figure available. ** = depreciation only up to and including 2014. Source: RSH, 2018 global accounts of housing providers; TSA, 2011 global accounts of housing associations; Housing Corporation global accounts

Scotland

As noted above, Scotland saw the largest decrease in pre-tax surplus of nearly 27 per cent to £184m. Operating surplus was down 21.8 per cent to £320m.

Looking at the individual accounts for Scotland’s HAs provides some context here. The top eight HAs for aggregated total pre-tax surplus for 2016/17 all saw significant decreases – ranging from 27 per cent to 88 per cent – in their surplus before tax this year.

Sanctuary Scotland Housing Association saw the largest decrease from £41m to nearly £5m this year. North Glasgow Housing Association saw a 78 per cent decrease from £6.5m to £1.4m.

Overall turnover continued on a steady upward trajectory, however, increasing 3.6 per cent to £1.6bn. Operating costs saw an increase of nearly three per cent to £1.3bn.

The total number of social housing units for Scotland increased by 1.4 per cent to 293,777 from 289,638.

Scotland global accounts 2017/18: eight-year summary

	Total 17/18	Change on year	Total 16/17	Total 15/16	Total 14/15	Total 13/14	Total 12/13	Total 11/12	Total 10/11
Total units	293,777	1.4%	289,638	289,620	287,038	285,181	282,966	282,514	278,811

Comprehensive income statement	£m		£m	£m	£m	£m	£m	£m
Turnover	1,616	3.6%	1,560	1,585.9	1,537	1,318.2	1,275.6	1,241.6	1,221.7
Operating costs	(1,296)	2.7%	(1,262)	(1,282.7)	(1,235)	(1,103.2)	(1,053.4)	(1,026.3)	(1,022.4)
Operating surplus	320	(21.8%)	409	298	304	203.8	213.9	215.2	199.3
Surplus on sales of assets	10	(28.6%)	14	12	10	13.6	5.9	(14.6)	(35.7)
Interest receivable and other income	7	(22.4%)	9	10	16	9.6	9.5	45.0	57.2
Interest payable	(169)	1.4%	(167)	(157)	(160)	(131.1)	(125.4)	(112.9)	(93.3)
Movement in fair value of financial instruments	7	106.1%	3	10.2	(21)	n/a	n/a	n/a	n/a
Movement in valuation of housing properties	£10m	(186%)	(£11.6m)	4.1	3.7	n/a	n/a	n/a	n/a
Pre-tax surplus	184	(26.7%)	251	171	153	96.4	103.9	132.7	127.5
Unrealised surplus/deficit on revaluation of housing properties	73	363.1%	16	(9)	(2)	n/a	n/a	n/a	n/a
Actuarial loss/gain in respect of pension schemes	53.0	25.3%	(42)	52	41	n/a	n/a	n/a	n/a
Change in fair value of hedged financial instruments	2.7	800.0%	(0.3)	(0.1)	(6)	n/a	n/a	n/a	n/a
Total comprehensive income for the year	312	39.7%	224	214	187	n/a	n/a	n/a	n/a

Statement of financial position
HAG	n/a		n/a	n/a	n/a	(7,257)	(7,104)	(6,919)	(6,661)
Other capital grants	n/a		n/a	n/a	n/a	(286)	(261)	(236)	(284)
Depreciation	(2,797)	+13.5%	(2,465)	(2,301)	(2,187)	(929)	(838)	(736)	(314)
Net book value	11,970	5.7%	11,321	10,826	10,504	4,858	4,404	4,023	3,509
Total fixed assets	12,331	5.8%	11,656	11,147	10,805	5,132	4,623	4,569	4,152

Cash in hand	660	1.9%	648	624.0	557.5	607	539	524	393
Other current assets	238	(4.3%)	249	221	235	402	519	272	263
Scottish housing grants under a year	(148)	17.8%	(126)	(185)	(268)	n/a	n/a	n/a	n/a
Current liabilities	(748)	20.4%	(621)	(646.5)	(759.0)	(444)	(498)	(429)	(425)
Assets less current liabilities	12,481	4.6%	11,931	11,345	10,838	5,698	5,184	4,936	4,382

Long-term loans	3,926	2.9%	3,815	2,731	2,678	3,378	3,154	2,992	2,634
Reserves	3,166	11.1%	2,851	2,612	2,397	1,950	1,619	1,469	1,176

Growth ratios
Growth in turnover	+3.6%		-1.6%	+3.2%	n/a	+3.3%	+2.7%	+1.6%	+1.4%
Profitability ratios
Operating margin	19.8%		26.2%	18.8%	19.8%	15.5%	16.8%	17.3%	16.3%
Net margin	11.4%		16.1%	10.8%	10.0%	7.3%	8.1%	10.7%	10.4%
Debt servicing ability *
Debt per unit	£14,730		£13,638	£12,814	£12,530	£12,184	£11,697	£10,908	£9,613
Interest cover	220		276	291.92	292.0%	101.2%	227.2%	226.6%	246.7%
Gearing	131		116	118.23	126.3%	31.9%	20.2%	19.9%	19.0%

Note: Figures from 2014/15 calculated under FRS 102, figures before 2014/15 under UK GAAP. Some FRS 102 and UK GAAP (including gearing) are not all directly comparable. n/a = not applicable under relevant accounting standard. Source: Scottish Housing Regulator; *=ratios before 2014/15 do not include intra-group finance

Wales

Wales’ operating surplus was down slightly by 0.5 per cent to £192m. This was made up of a five per cent rise in turnover to £953m and a 6.4 per cent jump in operating costs to £761m.

Total social housing units for the year were up fractionally by 1.1 per cent to 162,439.

Despite only a small fall in operating surpluses, Community Housing Cymru (CHC), the trade body that produces the global accounts for Welsh HAs, said welfare reform remains a concern with a slight rise in rent arrears from 4.3 per cent to 4.5 per cent.

Consequently many associations had included it as a higher priority on their risk registers, the CHC report said.

It added: “These pressures arising from welfare reform will further crystallise over the next few years as all claimants will transfer across to Universal Credit.”

The rise in total turnover to £953m from £908m included the maximum 2.5 per cent rental uplift that Welsh associations could apply (made up of Consumer Price Index at the previous September plus 1.5 per cent). The turnover from social housing lettings rose from £756m to £773m.

But costs rose too – by £65m to £645m – leading to a £48m fall in the surplus from social housing. However, non-social housing turnover rose while costs fell, leading to a £47m rise in the non-social housing surplus to £64m.

CHC’s report said the rise in turnover from social housing was attributable to service charges, higher rents chargeable for newly developed properties, and the annual rent increase.

Wales global accounts 2017/18: seven-year summary

	Traditional 17/18	LSVT 17/18	Total 17/18	Change on year	Total 16/17	Total 15/16	Change on year	Total 14/15	Total 13/14	Total 12/13	Total 11/12
Number of units owned and managed
General needs	72,023	66,444	138,467	+0.8%	137,349	134,539	0.6%	133,730	131,141	130,638	129,719
Supported	6,456	1,619	8,075	+15.9%	6,967	6,545	4.0%	6,293	7,925	8,893	8,743
Student accommodation	4,035	0	4,035	-1.6%	4,102	4,061	0.0%	4,061	4,235	4,112	4,103
Other	2,160	170	2,330	-25.2%	3,115	3,153	0.7%	3,131	13,318	9,458	12,587
Shared ownership	3,129	164	3,293	+26.2%	2,610	2,632	26.8%	2,076	n/a	n/a	n/a
Leasehold	1,921	4,318	6,239	-3.9%	6,493	6,678	1.5%	6,580	n/a	n/a	n/a
Total units	89,724	72,715	162,439	+1.1%	160,636	157,608	1.1%	155,871	156,619	153,101	155,152

Comprehensive income statement	£m	£m	£m		£m	£m		£m	£m	£m
Turnover	601	352	953	+5.0%	908	905	4.9%	855	784	736	675
Operating costs	(461)	(300)	(761)	+6.4%	(715)	(734)	4.0%	(698)	(634)	(582)	(528)
Operating surplus	140	52	192	-0.5%	193	171	3.0%	166	150	154	147

Surplus on sales of assets	3	11	14	+55.6%	9	12	20.0%	10	11	6	8
Interest receivable	7	0	7	-12.5%	8	7	12.5%	8	10	9	9
Interest payable	(87)	(36)	(122)	+1.7%	(120)	(112)	6.7%	(105)	(97)	(85)	(76)
Pension scheme net financing gain/loss	(0)	(0)	(0)	-100.0%	(5)	(5)	-44.4%	(9)	n/a	n/a	n/a
Fair value movements increase/decrease	2	1	3	-40.0%	5	2	n/a	0	n/a	n/a	n/a
Actuarial gain/loss on pension schemes**	1	14	15	-53.1%	(32)	4	-94.1%	(34)	n/a	n/a	n/a
Surplus for the year before tax	50	29	79	-12.2%	90	79	116.7%	36	74	85	88

Statement of financial position
Capital grants	n/a	n/a	n/a		n/a	n/a	n/a	n/a	(2,888)	2,768	(2,640)
Depreciation	(696)	(296)	(992)	+12.5%	(882)	(760)	14.3%	(664)	(357)	(301)	(252)
Net book value	5,167	1,223	6,390	+5.1%	6,078	5703	5.9%	5370	2,658	2,360	2,096

Total fixed assets	5,484	1,269	6,753	+5.1%	6,425	6,014	5.8%	5,676	2,773	2,515	2,226

Current assets	558	724	1,282	+1.8%	1,259	1282	-3.0%	1321	(443)	367	301

Short-term loans	(128)	(38)	(166)	+50.9%	(110)	(121)	20.6%	(102)	n/s	n/s	n/s
Short-term capital grant	(96)	(17)	(113)	+54.8%	(73)	(68)	18.4%	(38)	n/a	n/a	n/a
Other current liabilities	(153)	(107)	(260)	+4.4%	(249)	(269)	7.7%	(417)	(251)	(240)	(216)
Total assets less current liabilities	5,665	1,831	7,496	+3.4%	7,252	6,838	4.0%	6,580	2,965	2,641	2,311

Long-term loans	(2,098)	(558)	(2,656)	+2.4%	(2,594)	(2,377)	7.5%	(2,225)	2,112	1,883	1,642
Long-term capital grant	(2,680)	(226)	(2,906)	+4.3%	(2,787)	(2,626)	3.8%	(2,521)	n/a	n/a	n/a
Pension liability	(59)	(94)	(153)	-7.8%	(166)	(128)	5.8%	(120)	(26)	(50)	n/s
Total long-term creditors and provisions	(4,893)	(1,446)	(6,339)	+2.5%	(6,185)	(5,834)	3.2%	(5,656)	(2,159)	(1,951)	(1,691)
Net assets	772	385	1,157	+8.4%	1,067	1,004	8.5%	924	807	690	620
Reserves	772	385	1,157	+8.4%	1,067	1,003	8.5%	924	2,965	2,641	2,311

Growth ratios
Growth in turnover			+4.9%	+1,533.3%	+0.3%	+4.9%		+9.1%	+6.5%	+8.9%	+12.5%
Growth in operating costs			+6.2%	+338.5%	-2.6%	+5.3%		+8.6%	+8.9%	+10.0%	+9.9%
Growth in operation surplus			+0.0%	-100.0%	+12.7%	+3.0%		+10.6%	-2.6%	+5.1%	+22.9%
Profitability ratios
Operating margin**	23.3%	14.8%	20.1%	-5.2%	21.3%	18.9%		19.4%	19.1%	20.9%	21.7%
Net margin**	8.3%	8.2%	8.3%	-16.3%	9.9%	8.7%		4.2%	9.4%	11.5%	13.0%
Debt servicing ability
Long-term loans per unit**	£23,400	£7,700	£16,400	+1.9%	£16,100	£15,100		£14,300	£13,500	£12,300	£10,600
Gross interest cover***				-100.0%	172.0%	166.0%		158.0%	154.0%	189.6%	213.1%
Operating ratios
Management cost per unit			£1,217	+3.0%	£1,181	£1,221		£1,307	£1,293	£1,110	£1,023
Routine maintenance per unit			£1,113	+2.0%	£1,091	£1,087		£977	£1,369	£1,319	£1,199

Notes: Compiled from the financial statements of the 34 largest housing associations measured by number of units owned and managed. n/a = not applicable under relevant accounting standard, n/s = not stated. *‘Other’ units include market rent, shared ownership, extra care. **Net margin, operating margin, and long-term loans per unit calculated by Social Housing. ***Interest cover 2016 to 2014 operating surplus/interest paid; 2013 to 2011 is SBIT/gross interest paid. Source: ‘The 2018 Financial Statements of Welsh Housing Associations’, published by Community Housing Cymru and sponsored by the Welsh Government

Future

In 2020, HAs will account for their shares of the Social Housing Pension Scheme and the Scottish Housing Associations’ Pension Scheme on their balance sheets as defined benefit schemes.

A new accounting direction from the RSH, which will take effect for most associations in the 2020 accounts, means HAs will publish their internal value for money targets and plans to address underperformance.

It also covers the wind-down of the disposal proceeds fund, which happens by 6 April 2020 at the latest.

Social Housing special reports

Each month Social Housing focuses on a specific aspect of housing finance and collates and scrutinises the data for hundreds of housing organisations.

The reports below contain unparalleled commentary and analysis along with detailed sortable and searchable data tables.

Unit costs 2019 Our analysis of data from the English regulator has found that unit costs have risen among all types of housing association, with overall maintenance costs seeing the highest weighted average increase of nearly seven per cent

Impairment 2019 Housing associations’ impairments rise almost 40% in a year, driven by fire safety costs, contractor insolvencies and reduced land values

Global accounts 2018/19 Housing associations’ surplus for the year before tax decreased by five per cent to £3.76bn, driven by a 6.6 per cent drop in England

Affordable rent profile 2018/19 The level of affordable lettings dropped for the third year in a row

Staff pay Data from audited accounts of 206 housing associations shows that average staff pay in 2018/19 was £31,787 – a rise of 3.2 per cent over a 12-month period

Professionals’ league Our exclusive professionals’ league finds that activity continued apace in 2019, when housing associations increasingly looked to private placements

Sales proceeds Despite a 10 per cent rise in housing associations’ income from development sales in the last financial year, sales revenue is likely to remain flat over the coming years as a result of the property market downturn

Capital commitments The total capital commitments of 200 housing associations rose by 15 per cent in the past year, analysis by Social Housing has found

Reliance on sales surplus Social Housing finds that the total sales surplus of 150 English registered providers has dropped by nearly 10 per cent, as a result of lower market sales surplus

Stock dispersal How many council areas does your housing association operate in? How concentrated is its stock?

Accounts digest 2018/19 How does your housing association’s finances compare to others?

Housing Revenue Account part two How do councils compare in their 2018/19 Housing Revenue Account positions? Steve Partridge of Savills takes an in-depth look

Diversi fication of income We look at how housing associations are diversifying their income, and finds that they made 10.3 per cent more revenue from shared ownership and non-social housing activity

Impairment 2017/18 Social Housing takes a close look at the accounts of the 130 largest housing associations, and finds that impairments rose by nearly a third to £78.4m in 2018

Global accounts Social Housing’s analysis of the sector’s global accounts finds that housing associations’ pre-tax surplus fell last year – driven by drops in England, Scotland and Wales (August 2019)

Affordable rent profile We find that the number of affordable rent lettings recorded last year by housing associations in England has dropped for the second year in a row, suggesting that the sector is shifting away from the tenure

Capital commitments We scrutinise the capital commitments of the 208 largest housing associations in the UK (June 2019)

Housing Revenue Account part one Steve Partridge of Savills takes a look at the financial factors councils should consider in their Housing Revenue Account business planning (May 2019)

Reliance on sales surplus Our analysis reveals that profits form 42 per cent of 150 English housing associations’ total surplus (April 2019)

Sales proceeds We look at housing associations’ build-for-sale income and find a two per cent increase in 2017/18 (March 2019)

Shared ownership sales England, excluding London, has seen a four per cent rise in shared ownership sales – much lower than last year’s 16 per cent increase (February 2019)

Stock dispersal We show that housing associations’ general needs stock is becoming more concentrated within their local authority areas (January 2019)

Click here to find more special reports