As the NHF Treasury Management Conference 2019 drew to a close last night, we have been considering some of the key messages from the day which include:
- Brexit: the forecast is for a significant fall in house prices post-Brexit, which could provide an opportunity for RPs to acquire stock more cheaply than developing
- Governance: role play a crisis with your key service providers, e.g. if your repairs and maintenance provider goes bust
- Right to Buy: The Government’s proposed new “shared ownership RtB” is likely to be complex for founders and makes a stable cash flow volatile, but will depend on uptake
- Regulation: the RSH will be looking closely at RPs whose major works expensive is below the sector average; and at RPs who are still reliant on open market sales
- Data: ensure you can put your hands on key information for each of your units at any time, and demonstrate evidence of maintenance
- Climate change: take responsibilities seriously; ensure you meet all environmental standards, the burden of which is likely to grow so take this into account; and check for specific exposures on your stock (e.g. flooding)
- US Roadshows: consider these carefully. Saving a few points on your coupon can make them very worthwhile
- LIBOR phase-out in December 2021: RPs that have floating rate bank debt with a maturity post 2021 should be making sure they are comfortable with the fallback provisions in their loan agreements in the event LIBOR isn't available or considering using an alternative benchmark rate. SONIA, which is an overnight rate, has yet to be adopted at all for bank loans as the market tries to come up with a longer-term rate based off SONIA.
We had a great day there yesterday and please contact us if you would like to discuss anything further.