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Housing Association Assets Plunge

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Housing association assets plunge

Housing associations have seen the value of their properties and land fall by nearly £175 million during the past year, research shows.

The Tenant Services Authority (TSA), which regulates the sector, said 92 housing associations had reported impairment charges totalling £174 million in 2008/09.

But it said the charges represented less than 0.5% of the value of housing associations' total assets. It added that none of the associations had reported financial difficulties or breached covenants in their loan agreements with lenders because of the write-downs.

The regulator also reported a further fall in the number of unsold properties housing associations had, with these dropping by 7% during the three months to the end of June to 8,173, in a further sign that the property market is stabilising. It said that just over a third of unsold homes were currently reserved for sale.

There was also a reduction in the number of unsold homes that housing associations were converting into rental properties as sales of empty homes picked up.

Housing associations arranged £7.1 billion worth of new debt facilities during the year to the end of March, and they already have £4.7 billion of the £5 billion of debt they will need during the coming year in place.

Clare Miller, executive director of risk and assurance at the TSA, 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."

Too bad we will get stiffed with the bill, one way or another.

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