There were some great sessions and conversations at yesterday’s Social Housing Annual Conference.
Some of the key messages were:
1. It is a time of political uncertainty with both Brexit and the General Election looming. Funders, however, are not increasing rates and are taking a long-term view
2. Funding from capital markets (largely from overseas) is likely to continue to increase as RPs look for long term debt to reflect the long term nature of their businesses.
3. We can expect an increase in unsecured funding, although this is not the solution if you have a lack of security because you will need to demonstrate sufficient value is unencumbered - the good new is that you can use properties that have been dropped from previous security charging projects because they don’t meet the bank’s requirements
4. To ensure you can take advantage of new funding opportunities as they arise, get your assets clean and ready for charging now. We are helping a number of clients with this so do call for a chat.
5. The UK housing sector will need huge reinvestment in retrofitting programme to meet carbon reduction targets. This should be linked with health and safety improvements (including cladding) to ensure a holistic approach. Ensuring the Treasury understands the link is also crucial for a cohesive response from Government. RP business plans must allow for sufficient investment in existing properties to pay for this.
6. The Regulator’s Consumer Regulation Review includes a number of clues as to what we can expect regarding next steps on the Social Housing Green Paper
7. Over the last 3 years there has been a doubling of the number of Green Bonds issued, and emerging sustainability-linked funding and Social Bonds; a trend that is likely to continue as European investors in particular look for socially responsible investment opportunities. We have been delighted to advise on projects involving sustainability-linked lending that incentivise achievement of training/employment targets through improved interest rates
9. Whether UK social housing providers would benefit from issuing bonds structured to satisfy ICMA’s ESG principles and guidelines was a hot topic of discussion, with proponents arguing that it would allow RPs to access a far wider base of European investors than is currently the case, as well as attracting cheaper funding
10. Guidance Note 16, dealing with fire doors, will be released before Christmas but after purdah.
As well as this, there was some real common ground between RPs and funders, and some evidence of great partnerships. Overall it has been a great day. Please do contact us to discuss any of these issues further