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The North West's housing associations expect drops in rental income and government funding

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8:37 am, February 2, 2010
Housing associations urged to cut costs

By Michael Fahy

The North West's housing associations are expecting drops both in rental income and in government funding this year, with few believing that the sector will remain an area of priority funding after a general election, according to a new survey.

Some 86 per cent of social housing sector bosses surveyed by accountancy firm Baker Tilly said that they expected their peers to suffer some form of financial difficulty in the next 12 months and 36 per cent were already experiencing problems with their lenders. None of those surveyed expected conditions to improve in the sector at least until the middle of next year.

The accountancy firm also pointed out that although 64 per cent of housing associations expected funding to be cut after the election, only 43 per cent of organisations were actively making any cuts and the same number said that they intend to increase staff wages over the next 12 months.

“The social housing sector, with well protected rental income streams, has not yet felt the full force of the recession,” said the firm's North West head of social housing, Keith Ward. “Now, despite inevitable reductions in rental income from tenants and from Government grants, with no sign of improvements in the housing market, almost half of the social landlords we surveyed said that they are still not pursuing significant spending reductions in the next 12 months.

“Failure to take further action when faced with the current circumstances suggests an ongoing insulated view from harsh economic reality and may even signal a certain degree of complacency in some quarters.”

COMMENTS? mfahy@crain.com